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Under a new economic regime of high inflation and uncertain long-term growth prospects, the EU’s Stability and Growth Pact rules appear increasingly inadequate. Yet getting the EU budget rules right is essential if investors are to keep faith with the single currency. Tristan Perrier, economics insight specialist at the Amundi Institute, discusses the hows and whys around reforming the EU budget rules, some of the problems and fixes, and how a revised set of rules could be beneficial for investors given the likely implications on European growth and risk premia.
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