But we knew from the outset that paralysis was not an option: now is not the time for precision, but decision. To be sure, fiscal policy must do a lot of the heavy lifting, and the Canadian government has taken decisive steps. That’s appropriate: elected representatives are the ones to make those decisions. Fiscal measures can target sectors and groups most affected by crisis.
A key element of the institutional framework is the Stability and Growth Pact. The Pact provides a solid foundation for sound fiscal policies in individual countries as well as in the euro area as a whole.