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Stability and Growth Pact

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Abstract

The Stability and Growth Pact was designed in 1997 and implemented with the inception of the euro in 1999. An innovative tool in essence, it provides, first, a practical definition of the concept of fiscal sustainability by imposing a ceiling of three per cent and 60 per cent respectively on the budget deficit and public debt. Second, it offers guidelines for governments’ public finances. Third, it offers a way to coordinate national public finances to achieve an optimal fiscal–monetary policy mix within the Eurozone. Even before some countries breached the Pact, the economic literature argued about its rationales.

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Authors and Affiliations

  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    Thierry Warin

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  1. Thierry Warin
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Warin, T. (2018). Stability and Growth Pact. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2165

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