Perhaps some of you still remember the statement that the imposition of sanctions under the Excessive Deficit Procedure would be “semi-automatic” in future. Recently, however, greater emphasis has been placed on the use of “flexibility”. And the European Commission’s comments this week unfortunately indicate that these tendencies are likely to become even stronger.
The potential growth rate per capita seems to have stopped declining in around 2010, and has been more or less flat thereafter. Although estimates of the potential growth rate should be judged with some latitude, at least the observations so far suggest that the potential growth rate over the past year or two may be revised upward in a few years’ time.