Besides the operation of automatic stabilisers, which provide a significant cushion to the euro area economy by way of lower tax revenues and higher spending on unemployment benefits, the discretionary use of fiscal policy helped to mitigate the effects of the global economic downturn.
However, fiscal stimulus measures need to remain temporary and be combined with measures that ensure fiscal sustainability over the medium run. This will preserve trust in the sustainability of public finances and support both the recovery and long-term economic growth.