HKS Affiliated Authors
James W. Harpel Professor of Capital Formation and Growth
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Excerpt
Can the Euro's Fiscal Compact Cut Deficit Bias? Jeffrey Frankel, January 18, 2013, Opinion. "Europe’s fiscal compact went into effect January 1, as a result of its ratification December 21 by the 12th country, Finland, a year after German Chancellor Angela Merkel prodded eurozone leaders into agreement. The compact (technically called the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) requires member countries to introduce laws limiting their structural government budget deficits to less than ½ % of GDP. A limit on the “structural deficit” means that a country can run a deficit above the limit to the extent — and only to the extent — ..." Link verified April 4, 2014