Most importantly, the Stability and Growth Pact should not be softened by introducing further exceptions and a longer list of “relevant factors” (including cyclical developments to some public investments or state aid measures for the financial sector), that can be invoked in the assessment of compliance with the deficit and debt criteria.
This could create further room for unwarranted discretionary decisions and may open the door to lax fiscal policies at a time of much needed fiscal consolidation. As regards macroeconomic surveillance, we have often emphasised that, in order to be effective, it should have a clear focus on a restricted number of indicators capturing macroeconomic imbalances per se.