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Article: ECONOMIC POLICY: HOW THE BUSINESS CYCLE IMPINGES ON BUDGET SHORTFALLS.
- Article from:
- European Report
- Article date:
- October 3, 1998
CopyrightCOPYRIGHT 1998 Europe Information Service. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Summary:
The services of the European Commission's Directorate-General for Economic and Financial Affairs (DG II) has drawn up a report on the business cycle's direct impact on public deficit swings in all EU Member States.
For example, if growth in Belgium rises one point more than forecast, its deficit (if policies remain the same) will drop 0.6% and vice versa. The higher the figure, the more sensitive the government finances in the country concerned are to a change of course in the business cycle.
The different levels of "sensitivity" for each Member State will help the Commission services decide if the targets set in stability programmes ...