Finances publiques, sorties de crise..
The 2007-2009 financial crisis was caused by financial markets’ greed and instability and led to a strong rise public debts and deficits in advanced economies. Financial markets and international institutions advocate a “fiscal exit strategy” through rapid cuts in public deficits and debts under large public spending cuts. However the state of public finances was generally satisfactory before the crisis; the rise in deficits was needed for macroeconomic stabilisation purposes. Exit strategies should maintain interest rates at low levels and government deficits as long as they are needed to support activity. Strengthening the SGP would be dangerous if it deprived EU Member States of policy tools that were helpful in the crisis. In the euro area public debts should be collectively guaranteed by the ECB and the Member States to avoid speculation. World economic stability is not threatened by public finance imbalances, but by growing financial speculation. JEL Classification codes: E63, H63, N14.
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