The Fiscal Tools of Crisis Management – A Comparative Analysis

Abstract

The study provides an overview of three European countries’ crisis management in response to external shocks in 2008. Following a short theoretical outline, the paper evaluates the key characteristics of adjustment measures, placing special emphasis on the vulnerability of countries. On the basis of the analysed crisis periods it concludes that fiscal stability in itself is insufficient. As the study argues, economic policymakers must not be narrow-minded and -- along with maintaining fiscal prudency -- they also have to closely observe the regulatory activities of the financial intermediary system and other economic indicators.