Leading European research institute calls for changes in EU stability pact
UK-based National Institute for Economic and Social Research warns that the stability and growth pact, in its current form, could accentuate economic instability. In an interview with the Süddeutsche Zeitung the director of the institute, Martin Weale, said the pact encouraged "pro-cyclical fiscal policy". Mr Weale added that a reformed growth and stability pact would be considered more credible, but that the prospect of a reform would depend on the severity of the current economic downturn.
UK-based National Institute for Economic and Social Research warns that the stability and growth pact, in its current form, could accentuate economic instability. In an interview with the Süddeutsche Zeitung the director of the institute, Martin Weale, said the pact encouraged „pro-cyclical fiscal policy“. Mr Weale added that a reformed growth and stability pact would be considered more credible, but that the prospect of a reform would depend on the severity of the current economic downturn.
