In this respect it is clear that there is a very close relationship between the structural reforms already mentioned and sound fiscal policies. Structural reforms in state and local authorities’ spending and in social security management are vital to create room for manoeuvre, facilitating the reduction of deficits and - if there is enough room to permit it - the reduction of taxes.
BIS Review 52/2003  9  Positive spillover effects from structural policies for the conduct of monetary policy You may ask what all this has to do with monetary policy.