I’m sure the Greeks’s will be happy to be used to illustrate Wellink’s point. On the Eurogroup’s Growth and Stability Pact, which limits budget deficits to 3& under normal circumstances, Wellink says there is enough flexibility to allow countries to exceed that limit.
It was not that many years ago that both France and Germany were well over their Stability Pact limits, you’ll remember. Their deficits were closer to 5% of GDP , if memory serves, back when Oskar “the Red” Lafontaine was the German finance minister.
EUR/USD has come under some pressure in late European trade. US equities are falling on profit-taking after a 10% rally this week. This is prompting an uptick in risk aversion.