A mix of appropriate discretionary measures and automatic stabilisers has cushioned the impact of the crisis. The investment tax cut embedded in the 2010 budget is also welcome, but additional spending should now be resisted. Designing and clearly communicating a credible multiyear exit strategy is a priority. The needed consolidation represents an opportunity to rebalance public finances by cutting inefficient spending, increasing inheritance, property and carbon taxes and further reforming the pension system.
©OECD Observer 2010