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Theoretically all of Europe has one. (Maasricht treaty. 60% of GDP)
by tobias3 13y ago
Theoretically all of Europe has one. (Maasricht treaty. 60% of GDP)
- ThomPete 13y agoYeah but defacto they have none.
- fauigerzigerk 13y agoBut being a percentage of GDP and not a set amount of euros, the effect of this limit is quite different from the US. During a recession, the GDP obviously goes down (tautologically speaking), so the limit can be breached without borrowing a single euro more. It's basically a mandate for governments to act in a procyclical way instead of a countercyclical one as reason would suggest. Fortunately, that makes the mandate so obviously stupid that no one really cares about it during a recession or in other special circumstances (like the German reunification)