The 'Sense and Nonsense of Maastricht' Revisited: What Have we Learnt about Stabilization in EMU?

This retrospective argues that old criticisms of the Stability and Growth Pact survive intact, but emphasizes two further features. First, the Pact imposes constraints on national fiscal autonomy, but there are no clear cross‐border externalities that warrant debt and deficit limits. Second, the Pact cannot address E(M)U‐wide stabilization and the fiscal‐monetary policy mix.