Recent experience shows that opaqueness and lack of clarity  2  BIS Review 84/2008  undermine our fellow citizens’ respect for and even their interest in the European “construction”. The European Union will face many challenges in the next few years. Globalisation will continue, with its ups and downs, as in the past, and increased pressure on the use of finite resources.
First, increased fiscal deficits could fuel market concerns regarding a country’s ability to repay its debt, thereby placing upward pressure on interest rates and leading to worsening financing conditions for everyone. We have already seen a number of euro area countries’ long-term government bond spreads widen substantially vis-à-vis Germany, which demonstrates financial markets’ ability to distinguish between countries on the basis of their creditworthiness.