Fiscal space and low interest: A Eurozone perspective
The European Commission has just needed a fiscal stance that’s more supportive of the recovery and of monetary policy in the Eurozone. This column argues that the case is strong for spending now on investment and other targeted programmes supporting growth and employment. However, fiscal space is heterogeneously distributed over the Eurozone, with some countries in a position to exploit a clear margin, and others having to pursue a far more prudent approach of gradual debt unwinding. A common stabilisation capacity would help for managing shocks that can’t be absorbed by national stabilisers alone.