Once the ECB discontinues its public debt purchases, the fiscal constraint will return in the euro zone: What consequences?

Sooner or later, the ECB will discontinue its public debt purchases. The remaining fiscal deficits will then be financed, no longer by money creation, but by the issuance of real public debt to be held by real investors. This means that the fiscal constraint will reappear: once the ECB has discontinued its purchases, fiscal solvency will again have to be ensured. The implication for governments is that all decisions taken today that permanently increase the fiscal deficit (permanent increases in public spending, permanent tax cuts) must be taken bearing in mind that these decisions must absolutely increase potential growth in order to ensure fiscal solvency, without ECB purchases, despite the higher fiscal deficit resulting from these decisions .