Europe will need to fundamentally reset its fiscal policies
With spending and interest rates high, a fight over the EU’s debt rule is only the start
Fiscal rules always have exemptions. The one California passed in 1849 had an exception in case of insurrection. Many resource-rich countries’ rules can be suspended if commodity prices crash. And most guidelines have some kind of out in case of a pandemic. But in Europe exemptions have become so frequent lately that it is not clear how to reinstate the rules at all.
This article appeared in the Europe section of the print edition under the headline “A reckoning is near”
From the May 6th 2023 edition
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