Results of discretionary fiscal policy in the European Union countries in the economic crisis period

Abstract

The article aims to analyse and assess the response of fiscal stabilisation
policy to the financial crisis and its effects in the European Union countries.
To achieve the research goal, two stages of the stabilisation policy during the
crisis are analysed. The first stage, from the beginning of the crisis to the
turn of 2010, was characterised by the implementation of tools stimulating
the economy through fiscal expansion, which as a consequence contributed to
a sharp increase in deficits and public debt in most EU countries. Therefore,
the second stage of the EU‘s stabilization policy, from 2010 onward, assumed
a departure from the current fiscal policy (due to the growing public debt)
and a return to the concept of sustainable public finances and debt reduction.
The paper also attempts to evaluate the effectiveness of stabilisation activities
undertaken at that time.