IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-03403598.html
   My bibliography  Save this paper

The euro area at the edge of the downturn: is there any room for manoeuvre?

Author

Listed:
  • Christophe Blot

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Bruno Ducoudre

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Eric Heyer

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Raul Sampognaro

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

This Policy brief presents the last OFCE forecasts on the euro area countries and addresses the issue of margins for manoeuvre to cope with an extended period of economic slowdown in the area. Will fiscal rules fetter policy reaction? We forecast a growth rate of 1.2%, but negative risks remain substantial. We then discuss public debt evolution and compute the fiscal policies necessary to reach a 60% public debt over GDP target in 2040. The fiscal consolidation appears unrealistic in some countries, questioning the credibility of this target. In addition, we investigate the (moderate) effect of interest rate on the fiscal consolidation requirement. Finally, the very notion of fiscal space will depend on the speed of adjustment of public debt and on the level of interest rates.

Suggested Citation

  • Christophe Blot & Bruno Ducoudre & Eric Heyer & Raul Sampognaro, 2019. "The euro area at the edge of the downturn: is there any room for manoeuvre?," Post-Print hal-03403598, HAL.
    • Handle: RePEc:hal:journl:hal-03403598
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03403598
    as

    Download full text from publisher

    File URL: https://sciencespo.hal.science/hal-03403598/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-03403598. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.