A euro-area country that runs very large public deficits or shows a persistently high and rising debt-to-GDP

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A euro-area country that runs very large public deficits or shows a persistently high and rising debt-to-GDP ratio violates the provisions of a 2012 treaty aimed at promoting fiscal stability. Explain how such fiscal violations pose a challenge for the ECB in the form of moral hazard.

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Money Banking And Financial Markets

ISBN: 9781260226782

6th Edition

Authors: Stephen Cecchetti, Kermit Schoenholtz

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