Fiscal Policy Stance in the Euro Area

Marius Marinas

Theoretical and Applied Economics, 2008, vol. 2(519), issue 2(519), 19-24

Abstract: The budgetary position in the euro area and the EU improved significantly in 2007 compared to the previous year. The headline deficit declined to 1.6 % of GDP in 2006 and 1.1 % of GDP in 2007, down from 2.5% of GDP in 2005. The structural budget deficit diminished from 2% of GDP in 2005 to 0.8% in 2007, reflecting a restrictive fiscal policy in euro area. The fiscal policy became pro-cyclically because the economy of euro area is characterized by a slightly negative output-gap (estimated at 0.2% of potential GDP in 2007).

Keywords: euro area; Growth and Stability Pact; output-gap; structural budgetary balance; budgetary elasticity. (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:2(519):y:2008:i:2(519):p:19-24

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