This paper aims to inform policymakers, and other interested parties, about the IMF's approach to fiscal adjustment. The approach focuses on the role of sound and sustainable government finances in promoting macroeconomic stability and growth. Achieving, and maintaining, such a fiscal position...

The euro area recovered from the economic doldrums. Executive Directors welcomed the recovery, supported by strong financial conditions, global growth, and improved financial positions. They encouraged the reformed Stability and Growth Pact over fiscal policies, and underscored the need for...

This paper focuses on euro area policies. The monetary policy stance remains appropriate for now. Fiscal policies are falling well short of consolidation requirements, and the area remains insufficiently prepared for the looming demographic shock. Past fiscal policy failures, notably...

The continuing weakness of activity in the euro area reflects an amalgam of cyclical and long-term forces that are likely to shape the outlook and to challenge policies. Financial conditions in the area have improved along with those in global markets, though financial fragilities may be...

The staff report on Euro Area Policies highlights cyclical growth developments and risks. The area’s real GDP growth has picked up, responding to strong foreign demand and relaxed financial conditions. The final domestic demand growth remains subdued, and the area lags global growth by a large...

The 2012 Article IV Consultation report on euro area policies highlights that investors are withholding funding from member states most in need, moving capital “north” and abroad to perceived safer assets. Executive Directors have noted that the euro area continues to face a number of...

This paper reviews the pros and cons of institutionalized constraints limiting the freedom of national budgetary policies within an Economic and Monetary Union (EMU) in Europe. The issue is approached from three angles: the influence of EMU on (i) budget discipline; (ii) intergenerational equity...

The paper argues that international differences in fiscal conditions influence the relative attractiveness of locating production facilities in different countries and could prove to be a troublesome source of instability for the European economies. Even though physical capital movements tend to...

This letter provides an assessment of recent macroeconomic developments in Benin and an update on the discussions of Fund staff with the Beninese authorities on macroeconomic policies and structural reforms that could form the basis for the authorities' request for a new arrangement under the...

The sharp increase in fiscal deficits and public debt in most advanced and several developing economies has raised concerns about the sustainability of public finances and highlighted the need for a significant adjustment over the medium term. This paper assesses the usefulness of fiscal rules...