stability pact

Spanish economy 10th November 2022

Stability Pact reform pleases Spain and France but not Germany

Brussels’ compromise solution for reforming the Stability Pact has not served to bridge the traditional North-South divide that has plagued the EU when it comes to economic policy. The new deficit and debt rules proposed by Ursula von der Leyen’s Commission satisfy Spain and France, but unnerve Germany, which is demanding more fiscal discipline, as the daily El Español explains. A clash that highlights the enormous difficulty of finding an…

In Europe 21st December 2016

A Plea for Semi-Permanent Government Deficits

Francesco Saraceno | There are a number of ways, not necessarily politically feasible, to allow EMU countries to run semi-permanent government deficits. A first one could be to restore complete national budget sovereignty, (scrapping the Stability Pact). This would mean relying on market discipline alone for maintaining fiscal responsibility.

In Europe 28th November 2016

Some Animals are More Equal than Others

Francesco Saraceno | This post is nothing new. It is just a reminder for non European readers (or for distracted European readers), about the way things work in the EMU. The German Bundesbank President Weidmann violently attacked the European Commission for failing to enforce fiscal discipline within the Stability Pact.

Uncategorised 25th May 2016

Spain’s Public Deficit: Firemen Don’t Stand On Each Other’s Hoses

The European Commission did not want to meddle with Spain’s general elections on June 26th and has postponed until July its decision regarding a sanction for the country’s non-compliance with its deficit target. But none of the European community experts have ventured to confirm that this sanction will finally be imposed.

In Europe 28th April 2015

The loose ends of Spanish economy

MADRID | April 28, 2015 | By Carlos Díaz Güell | The Spanish economy is certainly turning the corner as evidenced by its growth rate, possibly exceeding 3% this year, and employment data, although both indicators are cooled down by analysts who believe growth in the medium and long term may be hampered by too many mortgages.

In Europe 27th March 2015

The Confidence Witch

PARIS | March 29, 2015 | By Francesco Saraceno | The confidence fairy seems to have turned into a confidence witch. One more victim of the crisis. But this one will not be missed.

In Europe 12th September 2014

Boosting growth is the only way of achieving fiscal consolidation

MADRID | By Luis Alcaide | In an op-ed at Wall Street Journal on Thursday, New EU Vice Commissioner Jyrki Katainen pledged for stimulating growth in the eurozone by keeping the proper fiscal consolidation. But his comment could be put in a different way: stimulating growth by all means as the only way of achieving fiscal consolidation. Stimulating growth means that deflation, a price level increase inferior to 2% (the Stability Pact target) is a more pressing requirement than meeting the 3% public deficit in the short term.