Euro zone: There is perhaps no discipline concerning fiscal policies

The discipline weighing on euro-zone countries’ fiscal policies and which prevents governments from maintaining excessive fiscal deficits may have two origins: Rules - based discipline (by the euro zone’s budgetary regulations); Market discipline (by the reaction of interest rates to excessive fiscal deficits). It is possible that neither of these two disciplines exists in the euro zone : the sanctions that could force governments to comply with the budgetary rules are not applied or are not credible; market discipline exists only if investors believe that a euro - zone country can default, but would a default be acceptable for the ECB and for the other euro-zone countries? If neither of the two disciplines exists, fiscal deficits can potentially persist or become large again in the euro zone.