Because they exert cross-border spillover effects, fiscal policies of individual EU member states are a common concern for the entire EU.

Faced with the impossibility of reaching a political agreement to review the fiscal treaties, the Commission could limit itself to applying the current rules with flexibility, which would maintain an ambiguous situation: much ado about nothing.

There are many reasons to reform the Stability and Growth Pact, but that reform is no panacea. This is because the euro area periphery has increasingly entered a debt conundrum.