With monetary policy centralised, fiscal policy in the euro area has been tightly co-ordinated at the central EU level since the advent of the single currency. The co-ordination framework is anchored in the 3 per cent of GDP upper limit for fiscal deficits and the requirement to reduce public debt to below 60 per cent of GDP at a satisfactory pace enshrined in the Treaty and a requirement to move towards and maintain fiscal positions in balance or in surplus over a medium-term horizon....