- Activities in euro area in last 2 years has shaken trust
- Need at least “minimum” fiscal rules for currency union
- Policy response to euro crisis has raised questions
- Question is whether EMU states will support each other
- Need to believe states like Greece will respect fiscal rules
- Significant progress being made on sanctions in euro zone
- Euro zone states need incentives not to break rules
- Talk of private sector Greek debt haircut was a negative
- Must be convincing that private sector haircuts “exception”
Dow Jones repoprting.
