At the current juncture, those countries with a deficit close to or exceeding 3% of GDP should embark on growth-fostering fiscal consolidation measures. This will help to build confidence in the fiscal framework and anchor expectations about the future macroeconomic environment. A credible medium-term oriented fiscal consolidation strategy, by strengthening confidence, will support economic growth also in the short term.
3 See, for instance, Rey, Hélène (2015): “Dilemma not Trilemma: The Global Financial Cycle and Monetary Policy Independence”, NBER Working Paper No. 21162, May; and Rogoff, Kenneth (1985): “Can International Monetary Policy Cooperation Be Counterproductive?”, Journal of International Economics 18:199-217, May. 4  • From a theoretical point of view, the existence of spillovers implies the presence of externalities.