Abstract:

Within the current economic situation, public finances play a central Role in stabilizing and also stimulating the economic environment. Financial policy adjustments based on the use of several intervention instruments, such as national budget or fiscal stimulus packages, aim to minimize the negative effects of the global economic crisis. Although past experience reveals high costs of public intervention, European countries agreed the public intervention is needed in all cases, but at a different extent. still. the stability and growth pact provides a flexible framework, which adapts to the particular economic conditions of the European countries consequently, the excessive deficit procedure mentioned in the pact takes into account several relevant factors before opening the procedure or stating deadlines for deficit corrections. Through this paper we intend to analyze the evaluation of the European financial policy as a response to the economic downturn, together with an overview of the surveillance mechanism regarding excessive deficit procedure. The paper is based on research made on several European countries main indicators and refers to some extent of Romania’s case, too.