Fiscal Policy Stance Reaction to the Financial/Economic Crisis in the EMU: The Case of Slovenia

Abstract: The article evaluates the current economic crisis ’ impact on changes in the adoption of fi scal policy measures for 16 euro-area countries in the 2004–2012 period and compares those changes with fi scal policy measures introduced in Slovenia. In general, the results suggest that the adopted fi scal policy measures in most euro-area countries were more ex-pansionary in the period before the current economic crisis started. The evaluation of the fi scal stance in Slovenia suggests expansionary and pro- cyclical fi scal behaviour during the 2005–2008 period, whereas the response of the fi scal authorities in Slovenia in 2011 and 2012 due to fi scal consolidation was more restrictive and pro-cyclical. Finally, we emphasize that inconsistent fi scal policy without structural reforms also being carried out may lead to a further deterioration of the fi scal position and macroeconomic situation of euro-area countries, including during a period of cyclical recovery