However, the historical experience of German monetary and fiscal policy shows that some substantial problems remained. Above all there was a lack of rules which prevented excessive budget deficits. The “golden rule” of public borrowing was not a sufficient protection against the accumulation of debt. From the beginning of the 1960s, the welfare state was greatly expanded.
Fiscal policies should be oriented towards making our economy more productive and gradually bringing down high public debt. Policies to enhance the euro area's supply capacity, especially in the energy sector, can also help reduce price pressures in the medium term.