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Read the text below in order to answer questionUnpicking the 12057

Read the text below in order to answer questionUnpicking the fiscal straitjacket   

        Never has a straitjacket seemed so ill-fitting or so insecure.

The euro area's "stability and growth pact" was supposed to stop

irresponsible member states from running excessive budget deficits,

defined as 3% of GDP or more. Chief among the restraints was the threat

of large fines if member governments breached the limit for three years

in a row. For some time now, no one has seriously believed those

restraints would hold. In the early hours of Tuesday November 25th, the euro's fiscal straitjacket finally came apart at the seams.   

        The pact's fate was sealed over an extended dinner meeting of

the euro area's 12 finance ministers. They chewed over the sorry fiscal

record of the euro's two largest members, France and Germany. Both

governments ran deficits of more than 3% of GDP last year and will do so

again this year. Both expect to breach the limit for the third time in

2004. Earlier this year, the European Commission, which policies the

pact, agreed to give both countries an extra year, until 2005, to bring

their deficits back into line. But it also instructed them to revisit

their budget plans for 2004 and make extra cuts. France was asked to cut

its underlying, cyclically adjusted deficit by a full 1% of GDP,

Germany by 0.8%. Both resisted.Nov 27th, 2003 The Economist Global AgendaIn "if member states breached the limit" (paragraph 1), "breached" could best be replaced by

Questão no QuestionsOf: Read the text below in order to answer questionUnpicking the 12057

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