It has expanded significantly over the past three years the GDP growth differential between the euro area and the United States: the average growth rate in the US was 2,3%, -0,1% in the Eurozone. The different fiscal policies provide an important explanation for the gap between economic performance: US policy has been much more expansionary than the European one for the entire duration of the crisis. In addition, the reduction of the deficit in the United States really only started once the recovery was consolidated, contrary to what happened in the Eurozone.
Although the GDP growth differential also depends on other factors (demography, productivity dynamics, different timing of the monetary policy response), in the United States the contribution to GDP growth from public spending was strong, especially in the initial phase of the crisis: +53,1% at constant prices in 2010 compared to 2006, the last pre-crisis year, equal to 13,6 points of GDP.
The partial return of the deficit, on the other hand, was obtained by maintaining real expenditure unchanged and collecting higher revenues thanks to the recovery of economic activity: +32,3% in 2014 on 2009 at constant prices (of which two thirds starting from 2012) but maintaining the incidence on GDP at 33,3%, same level as last year before the crisis.
On the contrary, inEurozone, the impact of tax revenues it grew by 1,9 points of GDP compared to 2007, the last pre-crisis year. Extraordinary it was the increase in social spending in the United States: +72,0% in 2013 over 2006, at constant prices, more than double the Eurozone (+33,4% between 2014 and 2007).
According to the Confindustria Study Center, if the US government had allowed public expenditure and revenue to grow according to the pre-crisis trend, the American GDP would have fallen by 2,4 percentage points more per year in the three-year period 2007-2009 and then would have increased by 2,2 points a year more in the following three years. Moreover, it is probable that the recovery would have been slower and in any case incomplete than that calculated mechanically, because the greater fall in GDP would have reduced the US growth potential.
In 'Eurozone, with the sovereign debt crisis erupting in 2010, the choice was to impose fiscal adjustment: in this way the countries of the Euro periphery, with the most conspicuous deficits and debts, were forced to withdraw suddenly, contextually and with enormous corrective manoeuvres. Freezing those shoots of recovery that the US has been able to protect.
