The objective of the Stability and Growth Pact is to secure sound fiscal policies, which have remained a national responsibility in Economic and Monetary Union. Ever since it first took effect, the Stability and Growth Pact had been subject to a reform debate, ultimately leading to its redesign...

Brandner, Diebalek and Köhler-Töglhofer assess fiscal policy in Austria over the period 1976-2004 by decomposing the observed budget balance into: a core balance, estimated by means of an unobserved components model; the effect of automatic fiscal stabilizers (as calculated by the European...