These budgetary developments reflect three main factors. The first, is the operation of automatic fiscal stabilisers, i.e. the reaction to the recession built into the budgets, given the existing social security and tax systems.
Second, the origins of the fiscal expansion are to be found in the stimulus packages that were a coordinated response to the European Economic Recovery Plan of December 2008 and bank recapitalisation. Their cumulative impact was roughly 2.3% of GDP in 2009–10. Third, a number of other factors show up in an expansionary fiscal stance, namely other discretionary measures, unexpected revenue shortfalls (e.g.