Answer to Question #131930 in Macroeconomics for miguel anisio

Question

 Explain the characteristics of the so-called preventive and corrective arms of the Stability and Growth Pact of european union .

Answer 1

1.The corrective arm ensures that Member States adopt appropriate policy responses to correct excessive deficits procedures.

2.Every April, EU Member States are required to lay out their fiscal plans for the next three years.

3.All EU countries are expected to reach their medium-term budgetary objectives (MTOs), or to be heading towards them by adjusting their structural budgetary positions at a rate of 0.5% of GDP per year as a benchmark.

4.Ensure the coordination of fiscal policies among Member States sharing the euro as their currency