Abstract
The current provisions of the Stability and Growth Pact (hereafter, SGP) advocate balanced budgets in the longer term and specify a ceiling for deficit spending of 3 per cent of GDP for each member of the European Monetary Union. A violation of the ceiling will trigger warnings and eventually penalties (unless exceptional circumstances can be invoked). In this form, the Pact suffers from several shortcomings that will limit its effectiveness and impose exceptional costs on at least some of the member countries.
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© 2001 Alessandra Casella
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Casella, A. (2001). Tradable Deficit Permits. In: Brunila, A., Buti, M., Franco, D. (eds) The Stability and Growth Pact. Palgrave Macmillan, London. https://doi.org/10.1057/9780230629264_16
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DOI: https://doi.org/10.1057/9780230629264_16
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-42727-7
Online ISBN: 978-0-230-62926-4
eBook Packages: Palgrave Business & Management CollectionBusiness and Management (R0)