Should the European Growth & Stability Pact, which limits deficit spending, be relaxed?
No. We don’t want to loosen the stability pact. I’m familiar with the discussion, which sometimes reflects a lack of awareness of what the stability pact is. What we need, and we have made this clear in Brussels, is that we shouldn’t just look at the deficit criteria. Of course we must examine the deficit very closely, but we should also look at other criteria: economic policy, overall debt, and inflation, for example. When the countries with higher inflation rates, particularly in the South, are able to achieve lower rates, then it will be possible for the European Central Bank to pursue a monetary policy that is more advantageous for German growth. The key isn’t solely in our hands. It belongs to the overall economic coordination of the euro zone. That means every country is responsible — either to maintain a prudent budget or to achieve a lower inflation rate, which Germany has. From Germany’s point of view, naturally the European Central Bank could pursue a different monetary poli
Related Questions
- If this measure results in revenue growth in excess of the spending limits is the government entity required to refund the excess to the taxpayers?
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