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Unlike the German government, the European Commission — and the Institutes — measure successful consolidation on the basis of the budget as adjusted for cyclical fluctuations and not the actual balance. The Commission believes Germany needs a balanced budget which has been adjusted for cyclical fluctuations; due to the uncertainties connected with the estimation of this balance, it might see a structural deficit of 0.5% of GDP as being compatible with the aims of the Stability and Growth Pact. Cf. European Commission, ’Public Finances in EMU, 2001; in:European Economy, No. 3/2001, pp. 38ff.
This proposal was explained by the Institutes in an previous report. Cf. Working Party of the German Economic Research Institutes (2001). ‘The World and the German Economy in the Spring of 2001’. In:Economic Bulletin, vol. 38, no. 5, May 2001.
Cf. Working Party of the German Economic Research Institutes (2001). The World and the German Economy in the Spring of 2001. In:Economic Bulletin, vol. 38, no. 5, May 2001.
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The German economy in the spring of 2002. Economic Bulletin 39, 153–174 (2002). https://doi.org/10.1007/BF02677711
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DOI: https://doi.org/10.1007/BF02677711