Disciplined and sound fiscal policies support the ECB's stability-oriented policy by reducing risks to price stability. The so-called automatic stabilisers are one mechanism which can cushion fluctuations in demand and price developments at national level. Automatic fiscal stabilisers are mechanisms built into tax codes  4  BIS Review 20/2002  and social legislation.
They lead to a timely and symmetrical reaction of the budget policies to economic fluctuations by reducing demand pressures in an economy during periods of strong growth and by supporting the economy in downturns, without requiring further government action.