§ Mr. Stephen O'BrienTo ask the Chancellor of the Exchequer what steps he would take following a decision to implement a discretionary fiscal policy to stabilise the economy as discussed in the Treasury publication Fiscal Stabilisation and EMU, to reconcile conflicting demands of fiscal sustainability and macroeconomic stability, as described in paragraph 4.23 of the document. [121550]
§ Mr. BoatengInside or outside EMU, the Government's pre-eminent fiscal objective is to ensure sound public finances over the medium term.
In the event of EMU entry, the adoption of an explicit fiscal stabilisation objective and rule would add an element of pre-commitment and help ensure that 133W discretionary fiscal policy operated symmetrically over the cycle and hence it would underpin rather than threaten fiscal sustainability.