Professor Philip Lane:

We now have at national and European level a framework with the fiscal rules and the independent fiscal council that is intended to make life easier. Let us imagine we are back in a boom situation and revenues are high, essentially the purpose of the fiscal rules and the fiscal council is to increase the political cost of excessive generosity. So now, if one likes, it is a restraint. I think those restraints are not fool proof.

If a government really wants to ignore the fiscal council and ignore the fiscal rules, it probably can get away with that for quite a bit. It depends on the political system buying into that rules-based framework. That is for the members, as politicians, to work out. It is that kind of framework where they are constrained in what they can do. It is important to say that across the world there is an understanding that essentially this does not end the political debate because one can have a high-spending government yet still running surpluses if it is prepared to raise taxation.

It is not about how much a country should spend or how much it should tax. It is saying that if it spends a lot over a cycle, it needs to raise enough revenue to match that.