In fact, many euro area countries, notably the ones subject to EU/IMF programmes, are following such a strategy which I would like to call the European approach to fiscal adjustment. If effectively implemented, such reform programmes would enable countries to address their sustainability risks and, at the same time, limit potential short-term costs of fiscal tightening through growth-enhancing structural reform.
Especially in the current environment of heightened market sensitivity, ambitious reform efforts should quickly trigger positive confidence effects and be conducive to macroeconomic stabilisation. It is, therefore, of the utmost importance that European governments implement the announced fiscal consolidation and reform measures and ensure – by all means – the  4  BIS central bankers’ speeches  delivery of agreed fiscal targets.