|
|
07Nov08: Euro Area - Fiscal
Fiscal packages in the euro area – stemming the downturn
On 05 Nov the German government presented a comprehensive fiscal stimulus package aimed at stabilising investment spending.
Similar packages have been enacted in other euro area economies, exemplified by France and Italy.
The common feature of the programs – prioritising stimulus for private investment rather than public spending – helps contain deficits, but makes the economic impact uncertain.
Asset conclusions: neutral for bonds, positive for the ECB, given limited impact on public spending.