Draghi & Lagarde versus European Debt Brakes

The demands of Mario Draghi and Christine Lagarde that fiscal policy must now increasingly tackle the weakening of the economy are met in Germany by the debt brake initiated in the Constitution for the Federal Republic of Germany, which has been introduced in a similar form by the European Fiscal Pact in another 24 member states of the European Union. Under the current circumstances, the German debt brake and the European Fiscal Pact provide very little room for manoeuvre in Germany and a few other euro countries, and in most euro countries no room for manoeuvre for pronounced discretionary fiscal impulses to stimulate the economy.

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