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The will to be stable

3 September 2004 By Edward Hadas

Peer pressure and market forces have stopped governments from borrowing irresponsibly so far. But the euro experiment is still fragile. The softening of eurozone borrowing limits is reasonable enough. But the new pact will be no more enforceable than the last. The new rules will not be any more enforceable than the old ones. But at least it won’t be so obvious that they are being flouted. What’s more, peer pressure and market forces will continue to keep governments from really wild borrowing.

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