FXstreet.com (Barcelona) - “Around a year ago, we noted that Spain’s fiscal plans were likely to be above the ‘speed limit’, however that Spain would likely be shown forbearance for missing the headline deficit target, and hence we were less concerned about ‘vicious tightening spirals’ occurring – as the data currently shows however, this appears to have been the case.” notes the Economics Research Team at Goldman Sachs.

When excluding the small program countries, where different rationales may apply, the EU Commission’s perceived tough stance with respect to austerity appears nevertheless to have resulted in a large, but ‘efficient’, consolidation over the past three years. Hence, the pace of austerity in the large Euro area countries, and the UK, does not appear to have been ‘inefficiently’ fast. That being said, growth would nevertheless have been higher absent these consolidations.