In my view, the same is broadly true of fiscal rules in a monetary union. You need fiscal rules that are clear and enforceable, rules that are the same for everybody and understood by all. Fiscal rules such as those contained in the Pact cannot be optimal at all times. But this does not mean they are bad rules.
And they are anticipating that governments around the world will continue to implement the necessary reforms. These expectations create vast scope for confidence shocks. This, in turn, interacts in an unfavourable way with another risk arising from a prolonged period of low interest rates.