Budget policy: At the interface of the need for consolidation and growth policies

In his commentary, the Bavarian Minister of Finance, Georg Fahrenschon, explains the connection between budget and growth policies. In his opinion Bavaria's consolidation policies are paying off and are laying the foundation for sustainable growth policies. The per-capita budget deficit in Bavaria is by far the lowest of all the federal states (excluding the city states). Bavaria's favourable position is also evident in the low interest costs of 2.7% and the high investment rate. The budget consolidation of recent years has enabled the Bavarian government not only to continue to fulfil its tasks, despite the economic collapse and sharp declines in government revenue, but also to cushion the impact of the crisis and to set a promising course for the future. In this way economical budget policies have paved the way for an active economic policy.