Public investment can stimulate economic growth

The Stability and Growth Pact defines upper ceilings for public debt that are often seen as a precondition for higher and sustainable output growth in the euro area. According to the pact, annual budget deficits should not exceed 3 percent, and debt-to-output ratios should be below 60 percent. If these limits are not met, corrective actions and even economic sanctions can be implemented, By Christian Dreger