The European economic rulebook will have to be updated to facilitate this. Does that mean that the Stability and Growth Pact, which our predecessors constructed thirty years ago, was bad economics? No, of course not. Against the economic backdrop of that time, it made perfect sense, and many elements continue to do so.
But the economic landscape has shifted, and so have our views on macroeconomic policy. Wasn’t it Keynes himself who once said: “When the facts change, I change my mind. What do you do, sir?” Of course, changing the rules takes time. What does that mean for fiscal policy in the meantime?