The ageing of the population in most industrialised economies and in the euro area in particular can be best characterised by a number of major demographic developments that have taken place over the last 60 years (Chart 1). 1  I thank particularly Victor Lopez Perez for his major contribution to this text and Jean-Pierre Vidal.
Moreover, Kasselaki and Tagkalakis (2016), using Greek data, have found that a government spending-based fiscal consolidation improves financial markets and boosts economic sentiment. This, in turn, mitigates the direct negative impact of fiscal consolidation on private investment and output, leading to a more rapid recovery.