Today’s discussion about making the SGP rules more flexible as a short-term remedy to the fiscal problems occurring in some Member States is counterproductive and at odds with the Maastrichtconsensus. In my mind, the SGP works as it is. The problem has been in its implementation. It is not the Pact itself which has disadvantages or which has failed.
In those conditions, the higher expected returns on business investment will make borrowing conditions still attractive even as nominal borrowing costs will tend to rise. From today’s point of view, we are still some distance away from a sustained adjustment.