Assessment of the fiscal stance appropriate for the euro area in 2019

On 18 June 2018, the European Fiscal Board (EFB) has published its assessment of the general orientation of fiscal policy in the euro area. The report concludes that the favourable economic outlook offers a prime opportunity to rebuild fiscal buffers. Especially euro area Member States with a high government debt-to-GDP ratio need to do more than simply accrue the budgetary benefits of the economic expansion. Lest we repeat the mistakes of the past and rob ourselves of room to manoeuvre when the next crisis hits, this is the time to move towards a somewhat restrictive orientation of fiscal policy in the euro area. It is also the time to upgrade the EU's fiscal framework and prepare a capacity for joint stabilisation for the euro area.