Working Paper
Applying nominal expenditure rules in the euro area
Clemens Fuest, Daniel Gros
ifo Institute, Munich, 2019
EconPol Policy Brief 15
ifo Institute, Munich, 2019
EconPol Policy Brief 15
![](https://www.ifo.de/DocImg/EconPol_Policy_Brief_15_Expenditure_rules.jpg?c=1689237132)
In the debate on euro area fiscal governance, the current deficit rules of the EU have repeatedly been criticised to have a pro-cyclical effect, leading to overly lax fiscal policies in good times and a too restrictive regime in bad times. An analysis by EconPol researchers Clemens Fuest (ifo) and Daniel Gros (CEPS) shows that most major EU countries are over-spending at a level not compatible with spending rules for sustainable public finances.