In view of the weakening economic outlook and the continued prominence of downside risks, governments with fiscal space that are facing a slowdown should act in an effective and timely manner. As long as fiscal sustainability is ensured, countercyclical fiscal policy could be very effective in the current environment, given that fiscal multipliers are higher when interest rates are low.
At the same time, governments in countries with high public debt should pursue prudent policies and deliver on structural balance targets. In addition to better national policies, work on completing the architecture of Economic and Monetary Union needs to continue.