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RESEARCH PRODUCT

Germany Needs a National Stability Pact

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In many publications1, Horst Siebert has recommended that national fiscal policies within European Monetary Union be subjected to certain conditions in order to lay the foundation for a stable currency. Provisions to this effect have been laid down in Art. 104 of the EC Treaty and the European Stability and Growth Pact. The first “acid test”, however, has cast doubt on whether these provisions are sufficient to ensure sustainable solid public-sector finance in the member countries.