German fiscal policy is nowadays often presented as a shining example due to successful budget consolidation after the Great Recession. However, the idea that the German success is the result of a well-thought-out economic strategy that could therefore serve as a role model for other countries...

The study looks at primary expenditure developments in the euro area, its three largest members and four "macro-imbalances" countries for the period 1999-2009. It compares actual expenditure trends with those that would have prevailed if countries had followed neutral policies based on...