Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/329933 
Authors: 
Year of Publication: 
2025
Citation: 
[Journal:] European Journal of Economics and Economic Policies: Intervention (EJEEP) [ISSN:] 2052-7772 [Volume:] 22 [Issue:] 2 [Year:] 2025 [Pages:] 168-180
Publisher: 
Edward Elgar Publishing, Cheltenham
Abstract: 
The article reviews the latest version of the proposal for a new Stability and Growth Pact of the European Union, as accepted by the European Parliament in April 2024. After summarising the main changes, the macroeconomic evaluation attempts to gauge whether the main goal of the Pact - reduction of the public debt level in high-debt countries- is likely to be achieved or missed due to counter-productive austerity. Four scenarios show the trade-off between debt reduction and the growth of primary public expenditures. Overall, the new Pact includes some advantages, but it is unlikely to reduce high debt down to 60 per cent of GDP and at the same time grant fiscal leeway for more infrastructure and climate policy. Milder but longer austerity will be a heavy burden for the future - stretching the pain seems to be the guideline. It might turn out to be more pain than gain.
Subjects: 
Fiscal policy
Public debt
Stability and Growth Pact
JEL: 
H30
H62
H63
H68
N14
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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