This is a real-life example of the intertemporal trade-off I’ve spoken about: the gain in the short run did not seem to be worth the potential cost in the long run. If financial vulnerabilities don’t spark such a conflict, then they don’t create a new trade-off that central banks need to worry about.
Fiscal deficits in most countries in the region have dropped, and in cases where they have not yet declined, serious attention toward achieving improvements is being mustered. Improvements in budget balances have not been achieved without pain. In many countries government payrolls have been slashed, generous transfer and subsidy programs have been cut, and social expenditures have had to be reduced.