But a suspension of all fiscal rules should not be our only tool to achieve a balanced policy mix to deal with economic shocks. That’s because the emergency clause also has drawbacks. The uncertainty about whether and when the clause is going to be activated makes the framework less predictable, and could discourage governments from engaging in countercyclical spending.
Moreover, depending on the circumstances, a complete suspension of the framework could be too much of a good thing, if it hampers fiscal discipline. Finally, both deactivating and reactivating the clause could prove politically difficult. Therefore, flexibility should somehow be a more intrinsic feature of the system, and not one that arises only in emergencies.