Discretionary fiscal
policy impact
(Policy measures)
Other policy measures
Fiscal stimulus packages
(Including non-crisis related measures)
(Measures taken in response to the crisis)
The fiscal impulse mechanism was a sophisticated method of stabilizing the situation. The final composition looked as following: 1,0% of GDP was given by measures on the revenue side, and 0,8% on the expenditure side, over the period 2009-2010,where more than half EU countries invested in the infrastructure, green industries and energy efficiency, that resulted in terms of budgetary effect in 2009-2010 with 28% of total stimulus. The reduction of taxes, social security contributions, VAT returns, subsidies and export promotion resulted in 17% of the total stimulus in the same period. However, the labor market stimulus was not very effective and accounted only for 5% of total stimulus; therefore it was adopted only by a few countries. On the following table you can see the components of fiscal impulse mechanism within the euro area countries.
Total fiscal impulse and its components by euro area country over the period 2008-2010
Fiscal variable |
Fiscal impulse (-Δ general government balance; p.p. of GDP) (a)= (b)+(c) |
Automatic stabilisers (-Δ cyclical component; p.p. of GDP (b) |
Fiscal stance and change in interest expenditure ( - Δ cyclically adjusted balance; p.p. of GDP (c) |
Fiscal stimulus packages (levels; % of GDP) (d) |
|||||||||
2008 |
2009 |
2010 |
2008 |
2009 |
2010 |
2008 |
2009 |
2010 |
2009 |
2010 |
|||
Belgium |
1.0 |
4.7 |
-0.1 |
0.4 |
2.2 |
0.2 |
0.6 |
2.5 |
-0.3 |
0.4 |
0.4 |
||
Germany |
0.2 |
3.4 |
1.6 |
-0.2 |
3.0 |
-0.1 |
0.3 |
0.4 |
1.7 |
1.4 |
1.9 |
||
Ireland |
7.4 |
5.3 |
2.2 |
2.0 |
2.9 |
0.2 |
5.4 |
2.5 |
1.9 |
0.5 |
0.5 |
||
Greece |
4.1 |
4.9 |
-0.4 |
0.3 |
1.3 |
0.8 |
3.8 |
3.6 |
-1.3 |
0.0 |
0.0 |
||
Spain |
6.0 |
7.2 |
-1.1 |
0.3 |
1.6 |
0.3 |
5.7 |
5.6 |
-1.5 |
2.3 |
0.6 |
||
France |
0.7 |
4.9 |
0.0 |
0.5 |
1.7 |
0.0 |
0.1 |
3.2 |
0.0 |
1.0 |
0.1 |
||
Italy |
1.2 |
2.5 |
0.0 |
0.8 |
2.5 |
-0.2 |
0.5 |
0.1 |
0.2 |
0.0 |
0.0 |
||
Austria |
-0.1 |
3.9 |
1.1 |
-0.2 |
2.4 |
0.2 |
0.1 |
1.5 |
1.0 |
1.8 |
1.8 |
||
Poland |
0.1 |
5.3 |
0.1 |
0.3 |
1.3 |
0.0 |
-0.2 |
4.0 |
0.1 |
0.9 |
0.1 |
||
Norway |
0.8 |
7.3 |
1.7 |
0.6 |
4.1 |
-0.1 |
0.2 |
3.2 |
1.8 |
1.7 |
1.7 |
||
Euro area |
1.4 |
4.4 |
0.5 |
0.3 |
2.4 |
0.0 |
1.1 |
2.1 |
0.4 |
1.1 |
0.8 |
||