It should come as a useful and timely wake up-call for those who are, in effect, contemplating watering down the institutional foundations of the euro’s stability. Reforming the Stability and Growth Pact under the pretext of rendering it more growthfriendly would be the wrong path to take. There is no such thing as the alleged trade-off between economic growth and fiscal prudence!
Nor is the budgetary discipline to be guaranteed by the Stability and Growth Pact a hardship that central bankers wish to impose on finance ministers. Budgetary discipline is a “must” in a monetary union of sovereign states.