So, instead of stimulating exports in peripheral euro-area countries, additional fiscal stimulus at a time when Germany’s economy is already running at normal capacity would be of detriment to all parties. 2.2  Fiscal consolidation  Turning to fiscal consolidation, it is often stressed that such measures, together with structural reforms, would be too much of a burden.
They would create a vicious circle of decreasing demand and further budget pressure that would eventually bring the economy down. But to the extent that the current output level was fuelled by an unsustainable ballooning of private and public debt, correction as such is unavoidable, and the only question that remains is that of the best timing.