Determined implementation of comprehensive structural fiscal reforms, on both the expenditure side and the revenue side, will bring additional medium-term rewards in the form of higher growth and more sustainable public finances. Such consolidation and reform strategies are needed to secure a sound macroeconomic environment in the euro area, which in turn enhances confidence and promotes investment, growth and employment in the euro area.
As regards the institutional framework for fiscal policy, the Governing Council of the ECB shares the concerns of the European Commission regarding the conclusions of the ECOFIN Council in November last year. The Commission is the guardian of the Treaty, and the Eurosystem respects the Commission’s decision to seek legal clarity on the implementation of the Stability and Growth Pact.