| Summary: | <p><span style="font-family: Arial; font-size: small; text-align: justify;">The global financial and economic crisis has reopened the debate on the role, the efficacy and limits of fiscal policies in sustaining aggregate demand. At the same time, the crisis has worsened the prospects of unsustainability of public debt in some countries. In order to conciliate fiscal rules for stabilizing the economy and measures aimed at reducing public debt it seems necessary to consider national specificities during the crisis. Economic areas and single countries within them are heterogeneous with respect to the timing and depth of their fiscal unbalances.</span></p><p class="MsoNormal" style="text-align: justify; margin: 0cm 0cm 0pt; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto;"><span style="color: black; mso-ansi-language: EN-GB;" lang="EN-GB"><span style="font-size: small;"><span style="font-family: Arial;">Consideration for the increasingly relevant linkages between public budgets and the disequilibria accumulated in other sectors of the economy makes it scarcely credible to pursue deficit reduction strategies on the basis of quantitative, rigid and uniform rules to be applied without regard for the deep differences between countries highlighted by the crisis.</span></span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0cm 0cm 0pt; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto;"> </p><p class="MsoNormal" style="text-align: justify; margin: 0cm 0cm 0pt; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto;"> </p><p class="MsoNormal" style="text-align: justify; margin: 0cm 0cm 0pt; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto;"> JEL: E52, G01, H62</p><p class="MsoNormal" style="text-align: justify; margin: 0cm 0cm 0pt; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto;"> </p>
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