Six economists from the European Stability Mechanism (ESM), the euro area’s permanent rescue fund, are proposing to reform the Stability and Growth Pact by, among other things, raising the general government debt reference for Member State to 100% of GDP.
“We suggest ways to simplify the rules to acknowledge the new economic reality and higher debt-carrying capacity (of states), possibly without the need for any (European) treaty change”, the authors write in their paper, published at...