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The current‑account deficit has been reduced, but there are risks of further cut‑back in credit that could intensify or prolong the reduction of output. The main challenge facing the policymakers is therefore to bring the economy quickly back to trend growth, which is complicated because of past policy commitments. Towards this goal, this Survey makes the following recommendations: During the past boom, the fiscal policy amplified an already highly pro‑cyclical growth of credit and wages. The current downturn presents the opportunity to adopt a fiscal rule of balancing the budget over the cycle to allow automatic stabilizers to work. The deficit target could be anchored in a medium‑term budgetary framework incorporating expenditure ceilings and a mechanism that claws back expenditure or debt overruns.