What is an excessive budget deficit

Reference no: EM131023049

In a column in the Financial Times, the prime minister and the finance minister of the Netherlands argue that the European Union, an organization of 28 countries in Europe, should appoint "a commissioner for budgetary discipline." They believe that: "The new commissioner should be given clear powers to set requirements for the budgetary policy of countries that run excessive deficits." What is an "excessive" budget deficit? Does judging whether a deficit is excessive depend in part on whether the country is in a recession? How can budgetary policies be used to reduce a budget deficit?

Reference no: EM131023049

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