Experience with fiscal policy over the past few decades is clear.

There are ways to fix both the banking and the fiscal problem.

The combination of credits from the other eurozone countries and lending by the IMF may provide enough liquidity to stave off default for a while. In exchange for this liquidity support, Greece will be forced to accept painful fiscal tightening and falling GDP.

In exchange for this liquidity support, Greece will be forced to accept painful fiscal tightening and falling GDP.

Whether the current episode will end in tears also depends on fiscal policy.

President Bush's view on taxation is strikingly different from his predecessor's.

The resulting austerity will hinder Europe s growth, and thus that of its most distressed economies after all, nothing would help Greece more than robust growth in its trading partners. And low growth will hurt tax revenues, undermining the proclaimed goal of fiscal consolidation.

And low growth will hurt tax revenues, undermining the proclaimed goal of fiscal consolidation.

Fiscal repair is also essential.

That is true of both monetary and fiscal policy the two mainstays of modern countercyclical stabilization.

On paper, the Greek bailout will impose a fiscal tightening, thereby aggravating the country s economic slump.

Europe is mired in its oxymoronic commitment to expansionary fiscal austerity.

Perhaps more important has been a profound mismatch with fiscal policy.

NEW YORK The Greek debt crisis has prompted questions about whether the euro can survive without a nearly unimaginable centralization of fiscal policy.

Fourth, it is difficult to overestimate the importance of fiscal discipline to longer term growth.

In short, fiscal consolidation would be both easier and less painful if Greece had its own monetary policy.

Given the fiscal legacy of the current crisis, no efforts should be spared in anchoring fiscal discipline firmly in European Union countries. Institutional measures such as fiscal frameworks and public debt thresholds can do much to help.

Given the fiscal legacy of the current crisis, no efforts should be spared in anchoring fiscal discipline firmly in European Union countries.

A Cure for Fiscal Failure?

Moreover, given continuing malaise in credit and housing markets, private consumption will remain subdued indeed, two percentage points of the 2.8 expansion in the last quarter of 2011 reflected rising inventories rather than final sales.

Fiscal tightening will escalate in 2012 and 2013, contributing to a slowdown, as will the expiration of tax benefits that boosted capital spending in 2011.

To offset the negative impact of private sector deleveraging on growth, the US government has maintained expansionary fiscal and monetary policies.

But when and how the Fed will begin tightening monetary policy remains unclear.

The same approach should work for fiscal policy. Some, of course, may fear a loss of democratic accountability.

The same approach should work for fiscal policy.

Will near zero interest rates, financial sector bailouts, and fiscal stimulus work?

But continued growth increases demand for oil, sending prices even higher. The alternative to monetary and fiscal expansion is recession, at which point oil prices would stop rising.

Instead, they emphasized the importance of sustainable public finances and the need for measures to deliver fiscal sustainability.

And Europe s preferred solution more austerity is merely causing fiscal targets to recede faster.

Finally, there is the relationship between oil prices and fiscal and monetary policies in the oil consuming countries.

The government follows a wise fiscal strategy that involves budget surpluses in years when copper revenue is high, with the additional funds channeled to a national stabilization fund.

Moreover, instability would become chronic, because the eurozone would no longer offer a backstop for fiscal and financial laxity.

This latest round of monetary tightening in China reflects the authorities growing concern over liquidity. In 2009, M2 money supply (a key indicator used to forecast inflation) increased by 27 year on year, and credit expanded by 34 .

This latest round of monetary tightening in China reflects the authorities growing concern over liquidity.

A key priority for advanced economies is to continue the process of fiscal adjustment that most of them initiated this year.

Tightening fiscal policy would go a long way towards boosting confidence in the US.

By the same token, I cannot think of a single economy whose long term growth prospects were damaged by excessive fiscal stinginess.

This analysis comes in three complementary documents the World Economic Outlook, the Global Financial Stability Report, and the Fiscal Monitor.

In Denmark, this has meant a tightening of asylum policies, with support from across the political spectrum in the last three governments.

Russia s censorship spree continues

President Bush's view on taxation is strikingly different from his predecessor's.

Only time will tell if this plan will work i.e. whether Greece will turn out to be illiquid but solvent, conditional on credible fiscal austerity and structural reforms and with the help of large amounts of financial support. But, as with Argentina, Russia, and Ecuador, Greece may also be insolvent if adjustment fails to restore debt sustainability and growth.

Only time will tell if this plan will work i.e. whether Greece will turn out to be illiquid but solvent, conditional on credible fiscal austerity and structural reforms and with the help of large amounts of financial support.

Now consider fiscal policy. The baroque structure of US government has always been hostile to the effective exercise of fiscal policy.

Nor does the Treaty do enough to strengthen coordination of Europe s economic and budgetary policies.