Sustainable Fiscal Policy Calls for More Restrictive Debt Rules for Eurozone

One of the key issues on the table in the Jamaica coalition negotiations is the next German federal government’s position on reforming European Monetary Union. One of the highly controversial topics under discussion is the future of European debt rules. Critics claim that the current rules are too restrictive and will hamper public investment. In reality, a serious application of the existing concepts for ensuring sustainable fiscal policy would call for stricter, not softer debt rules.