A better policy is to implement fiscal consolidation when the economy is strong.
"If you like, it is a bit of a self-inflicted goal in terms of the damage done to real take-home pay, perhaps another way of trying to implement fiscal consolidation through moving up the price level," he said.
Tsipras must now implement a fiscal consolidation and reform programme that was designed to fail.
France has implemented a fiscal consolidation plan; Italy's cabinet approved one on June 30th.
But it added that a "combination of political will and medium term fundamental underlying economic strength will, in time, allow the government to implement its fiscal consolidation plan and reverse the UK's debt trajectory".
Many of the countries in the eye of the storm today including Britain, Ireland, Italy and Portugal are on this list, having been forced to implement severe fiscal consolidations before.The paper then looks at what happened to incumbent governments that faced elections either during the period of fiscal tightening or within two years of its having come to a close.
Sweden was governed by one in the mid-1990s, when it implemented a bold fiscal consolidation.
"Until we see signs that the government is implementing the medium-term fiscal consolidation programme and signs of life in the Spanish economy, investors are going to worry about the trajectory of the debt-to-GDP ratio in the medium-term," said Nick Stamenkovic, bond strategist at RIA Capital Markets.
As an illustration, try reconciling the G-7′s "callh all" wording on fiscal policy -- "we must all set out and implement ambitious and growth-friendly fiscal consolidation plans rooted within credible fiscal frameworks" -- with the two strikingly opposing views expressed last week by Germany's Finance Minister and the U.S. Secretary of the Treasury.
"If the post-election fiscal consolidation is implemented, then the UK's fiscal deficit should fall markedly further in coming years, with a surplus in prospect towards the end of the decade.
