How does the proposed fiscal stimulus take account of the fact that Member States have different starting positions?
Co-ordination does not mean that all Member States should adopt the same approach. This would make no sense. Those who took advantage of the good times to achieve more sustainable public finance positions have more room for manoeuvre now. For Member States, particularly those outside the euro area, facing significant external imbalances, the aim of budgetary policy should be to correct those imbalances. So this is not a one-size fits all Plan. As President Barroso has put it: “Everyone is suffering from this crisis and everyone needs treatment. But not everyone needs the same pill.” Neither is the fiscal stimulus a zero sum game where Member States make payments into a central “pot” and one euro less paid in by one country means another has to pay one euro more. Instead, this is about a coordinated fiscal response where each Member State, within an overall European framework, takes the taxation and investment measures which suit its economic situation and strategy, thus supporting its
