Protracted excessive deficits may undermine the credibility of the EU fiscal framework, thus casting doubts on fiscal sustainability and jeopardising the Stability and Growth Pact. In this respect, let me say that the current crisis has taught us an important lesson about the importance of preserving the public’s trust in the soundness of public finances.
At the current juncture, euro area governments must make credible commitments to return to sound fiscal policies. Doing so in full compliance with the Stability and Growth Pact is the most credible exit strategy. This requires, first, a full reversal of the fiscal stimulus measures taken so far.