That applies, above all, to a monetary union in which the stability costs of government debt and deficits also have to be borne by others. (2)  Only budgets which are on average over the cycle balanced in surplus provide scope for the steadying influence of the automatic stabilisers and at the same to reduce long term debt levels.
(3)  Not least, we have to counter the growing costs of government debt at an early stage. I am referring here to the existing explicit and implicit debt and to the fact that due account has to be taken of the dramatic demographic trends in an aging society. Sound fiscal consolidation contributes directly to credible macroeconomic stabilisation.