A successful exit from the strong fiscal expansion in the wake of the recent crisis will require ambitious measures and a strong political will regarding implementation. I am confident that European fiscal policy makers will succeed in restoring the sustainability of public finances.
The adjustment efforts undertaken by the Irish government and more recently by the Greek government can be seen as promising first steps in the upcoming consolidation process. Policy responses to imbalances One of the main drivers of the financial crisis were the large global external imbalances. These imbalances implied massive capital inflows into deficit countries.