We believe that nothing can replace the importance of empowering people with social and economic stability, which will help them break the cycle of poverty and provide them with the skills necessary to sustain long-term self-sufficiency.

WHITEHOUSE: A Safe Haven

Whether either should have been at risk at all is another matter: Gordon Brown, Britain's finance minister, having beaten off commission criticism of his own spending plans, said there was growing support for a less mechanistic view of the stability pact, taking greater account of the economic cycle and of the levels of investment and public debt.

ECONOMIST: Germany escapes an EU reprimand for its big budget deficit

LSE's Mr Layard argues that the stability and growth pact will not constrain the role of fiscal policy in stabilising the economic cycle, because the British budget is in balance.

ECONOMIST: s for EMU | The Economist

Second, once the economy goes into the next boom cycle, the financial institutions could be at greater risk simply because the concern among prosecutors over jobs and financial stability will be proportionately less acute.

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Adjusting for the economic cycle, fiscal policy has been much tighter in the euro area than in America or Britain, thanks to the stability and growth pact, which forced governments to raise taxes even during a downturn.

ECONOMIST: The European Central Bank