target and scarcely a single policy area remains which cannot be classified under “relevant factors” or special circumstances to be considered when deciding on excessive deficits. The economic rationale of the new version, much cited by politicians in opposition to a “legal interpretation”, does not bear up on closer examination.
As the financial landscape became more uncertain, a broader tightening of credit conditions took hold, with investors becoming less willing to bear risk, more concerned about the valuations of a wide range of complex financial instruments, and more concerned about counterparty credit risk.