Recreating fiscal space by raising potential output through reforms and public investment, and respecting the European fiscal framework will maintain investor confidence in countries with high public debt, low growth and low fiscal space. But as fiscal expansion in the other countries may have limited spillovers, national fiscal policies remain constrained.
To be sure, the history of world business is strewn with Fisks, Goulds, and numerous others treading on, or over, the edge of legality. But they were a distinct minority. If the situation had been otherwise, nineteenth-century market economies would never have achieved so high a standard of living.