European fiscal policies under the stability pact - some first insights

Harmen Lehment

No 1098, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: EU Member countries have shown different degrees of ambition to reach a budget position of ?close to balance or in surplus'. Differences in ambition can only partly be explained by the relative size of cyclical safety mar­gins or differences in the number of votes in the ECOFIN Council. It is also shown that in the medium run there is no evidence for a trade-off between budget consolidation and growth. Of the eight countries with the strongest reduction of structural budget deficits in the period 1992-2001, only one showed growth rates below the EU average. The other seven countries even managed to achieve higher growth rates than in the period 1974-91 during which structural deficits had increased.

Keywords: budget deficits; European Union; fiscal policy (search for similar items in EconPapers)
JEL-codes: E61 E65 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1098

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