##gs, do not end up being out of phase with the cycle, or having an undesirable longer - term impact on the equilibrium of public finances ). these conditions are not easy to stick to in practice. an intermediate possibility, of which professor blanchard is a proponent, is to make any non - automatic fiscal response to very large shocks not fully discretionary, i. e., to have specific measure triggered by pre - defined exceptional circumstances. the idea is not in fact totally new ; it dates back to one of the earliest paper on the subject ( musgrave and miller, 1948 ) : " the flexibility of the tax system might be 1 / 5 bis - central bankers'speeches increased if provision was made for automatic adjustment in tax rates with changes in income but this could hardly be called built - in flexibility in the usual sense of the term ". however, it has been explored more rigorously in recent years ( e. g. eichenbaum, 2019 ; blanchard and summers, 2020 and boushey et al., 2019 ). basically, the idea consists in changing the parameters of fiscal policy ( e. g. the generosity of the unemployment benefit scheme or the tax rates ) for a period of time, when one or more business - cycle indicators ( like the unemployment rate or the output gap ) exceed certain thresholds. this approach reduces the distortions and delays typically implied in fully discretionary measures. one can think of several objections. defining appropriate indicators and thresholds, for instance, may be tricky, both on theoretical and practical grounds. ( professor blanchard discusses certain key details in his joint 2020 paper ). issues of statistical measurement may arise. the possibility of ex - post tampering with duration and parameters may reintroduce some of the problems inherent in pure discretionary action. various potential practical pitfalls will have to be taken into account. still, i understand that an arrangement of this type is actually in place at least in the case the us unemployment benefits scheme. it might be useful to explore the possibility of making use of a similar arrangement in a supranational context, with an open mind and a very pragmatic attitude. fiscal rules fiscal rules in a monetary union are needed to ensure the stability of the area by preventing harmful spillovers caused by public - finance tensions in member states. for this reason, members are required to pursue sound forward - looking fiscal strategies to guarantee long - term sustainability. this will make public finances

46. 8 10. 3 5. 6 2. 7 19. 9 4. 8 4. 1 47. 4 10. 1 5. 5 2. 7 20. 2 4. 6 4. 2 47. 2 9. 8 5. 4 2. 7 20. 1 4. 1 4. 0 46. 1 9. 7 5. 5 2. 6 19. 9 3. 9 4. 0 45. 7 9. 5 5. 5 2. 6 19. 8 3. 8 3. 6 44. 9 38. 5 41. 5 41. 4 40. 7 41. 6 42. 6 42. 6 42. 0 41. 7 41. 1 3. 0 1. 4 4. 4 47. 8 3. 4 1. 8 5. 2 51. 2 2. 9 1. 2 4. 2 49. 9 2. 8 1. 2 4. 0 49. 4 2. 6 1. 4 4. 0 50. 8 2. 4 1. 2 3. 6 51. 1 2. 3 1. 4 3. 7 50. 9 2. 2 1. 9 4. 1 50. 3 2. 1 1. 3 3. 4 49. 1 2. 0 1. 9 3. 9 48. 7 42. 9 46. 7 45. 6 44. 7 45. 6 46. 2 46. 3 46. 1 45. 1 44. 9 source : based on istat data. ( 1 ) rounding of decimal points may cause discrepancies in totals. table 5 general government borrowing requirement ( billions of euros ) year first 7 months borrowing requirement net of privatization receipts ( a ) 56. 9 44. 1 58. 8 22. 5 46. 5 24. 1 privatization receipts ( b ) 6. 6 0. 9 0. 1 0. 8 0. 1 0. 0 borrowing requirement ( c = a - b = d + e + f + g + h + i ) 50. 4 43. 2 58. 8 21. 7 46. 4 24. 1 currency and deposits ( 1 ) ( d ) 5. 1 - 4. 9 0. 0 - 5. 4 8. 7 7. 6 of which : post office funds - 1. 5 0. 1 - 1. 9 - 0. 6 - 1. 1 - 0. 7 short - term securities ( e ) - 9. 5 - 8. 0 - 0. 5 2. 3 8. 9 6