A New Framework for Fiscal Policy Consolidation in Europe

Current developments in Greece make clear that the rules of the European Stability and Growth Pact (SGP) were neither strict enough nor enforced strictly enough. To deal with the ongoing exit from the fiscal crisis and its related phenomena, the authors of this article propose a new framework for fiscal policy consolidation in Europe.

The centrepiece is a European Consolidation Pact to supplement the SGP which would supply loan guarantees in exchange for a fee and stricter budget consolidation measures. The new framework also spells out the details of an orderly government default.

[Full text of articles can be found in the Intereconomics Archive two years after the initial publication]

• Primary Source

Intereconomics: Archive http://archive.intereconomics.eu/years/

ESO: Background information: Seven banks fail EU stress tests http://www.europeansources.info/record/seven-banks-fail-eu-stress-tests/

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