Meanwhile, it is reported that the surge in gasoline prices may reflect Russia limiting output to the level mirrored in long-term contracts. As demand has all of a sudden accelerated, Russia has not allowed for an increase in output based mostly on conditions within the spot market. Although Russia has been criticized for the present scenario, outgoing German Chancellor Merkel defended Russia’s place, saying that Russia is simply supplying what the market demands. US Energy Secretary Jennifer Granholm suggested that the United States might be in a position to help the European situation and warned in opposition to Russian manipulation of gas prices.
Sustainability of fiscal policy is historically assessed by projecting the ratio of public debt to GNP considering expected budgetary developments. In the same spirit, the paper presents an indicator of sustainability for instance how a lot change in authorities spending and/or taxation should be made to assure that the ratio of public debt to GNP stays unchanged. Using this new indicator, the paper appraises the diploma to which current fiscal policies are sustainable in a sample of OECD nations over brief, medium, and long-term horizons.