Columbia International Affairs Online: Policy Briefs

CIAO DATE: 12/2013

A case for adjusting fiscal consolidation in the eurozone

Xavier Vanden Bosch

January 2013

EGMONT – The Royal Institute for International Relations


Fiscal consolidation is essential to ensure the sustainability of eurozone countries ’ public debt . However, as a principle, consolidation should not be pursued at a pace unnecessarily undermining growth in the short term. Repeated d ownward revision s of growth call for the use of the flexibility foreseen in the EU fiscal framework . The Commission should adapt the deadlines for fiscal correction to prevent excessive, pro - cyclical adjustment in 2013 . In turn, adequate surveillance and coordination must ensure structural adjustments constitute the core of fiscal consolidation plans .