The ECB and the Banque de France – Christian Noyer and myself – have always said with regard to Europe that the Stability and Growth Pact was not an artificial creation conveying an ultra-orthodox view of the economy coming from across the Rhine.
The reason for the delay is the existence of significant productive capacity that remains unused in many of the developed nations. While the U.S. economy has clearly strengthened, it has not yet returned to pre-crisis output and employment levels. Its unemployment rate, for example, remains near 9 percent. In the U.K., unemployment remains near 8 percent.