16 May 1999 Macroeconomic Effects of Fiscal Consolidation Policy in the EU Markus Marterbauer, Ewald WalterskirchenFuture fiscal consolidation measures within the framework of the "Stability Pact" may result in a more significant slow-down of economic growth than that experienced during the 1995-1997 period. One-off effects and outsourcing measures are limited in scope, further interest rate effects are not to be expected, least of all in the former soft-currency countries, devaluation has become impossible within the Monetary Union, and the saving ratio of households is expected to stabilise on a medium-term basis. Hence, an anti-cyclical budget policy is called for from the macroeconomic point of view. Vienna, 16 May 1999. For further information, please refer to Mr. Markus Marterbauer or Mr. Ewald Walterskirchen, phone (1) 798 26 01, ext. 303 or 257. This article will be published in WIFO's Austrian Economic Quarterly, 2/1999. |