- "In Toronto, G-20 leaders agreed that the pace at which fiscal stimulus is phased out and reversed into fiscal consolidation should vary from country to country, depending on the relative fragility of the debt and growth outlook. This pragmatic approach suggests that we should not expect any meaningful change to the fiscal stance for 2011 announced by G-20 countries before the meeting in Toronto."
- "On the basis of the fiscal measures so far announced by eurozone countries, we estimate the size of the budgetary consolidation that will take place at the area-wide level. Overall, we expect that the fiscal stance will remain broadly neutral this year and turn restrictive in 2011,
but the drag on growth should be manageable."
- "Our analysis suggests that fears of an austerity-driven double dip recession are exaggerated. Even taking into account the margin of uncertainty surrounding the estimate of the fiscal multiplier, we think that the impact of budgetary consolidation on GDP growth should be totally offset by the euro depreciation."
- "We emphasize that policy-makers should focus not only on the overall size of the budgetary correction, but also on the quality of the adjustment. The European Commission suggests that there’s no inconsistency between budgetary consolidation and growth, provided
that fiscal austerity is designed properly and the relevant time span exceeds one year."
Unicredit Economics Special 20100701
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