27 Mar 2019

Applying nominal expenditure rules in the euro area

Clemens Fuest / Daniel Gros


In the debate on euro area fiscal governance, the current deficit rules of the EU have repeatedly been criticised to have a pro-cyclical effect, leading to overly lax fiscal policies in good times and a too restrictive regime in bad times. An analysis by EconPol researchers Clemens Fuest and Daniel Gros shows that most major EU countries are over-spending at a level not compatible with spending rules for sustainable public finances.

Access this EconPol Europe Policy Brief here.