Debt Retrenchment Strategies and Control of Public Spending

Abstract

Carine Bouthevillain, Laurent Paul and Jeanne Pavot observe that government debt in major developed countries has reached historically high levels for peacetime. They argue that in many countries, especially in Europe, fiscal adjustment must come from the control of public spending. The first part of the paper examines several countries that have successfully reduced deficits and points to some general features of their experiences. The second part considers public expenditure developments in EU countries and evaluates the role of spending.