Although the government’s anticyclical policy during the
recession was in line with Keynesian fiscal policy prescriptions, its
behaviour during the time after the crisis was not: in the period
from 1977 to 1982 continuously high deficits were incurred in
good and bad years alike. The government, partly under foreign
pressure to act as an “engine of growth”, did not even avail itself
of the favourable economic conditions of the late 1970s to slow
down new borrowing. Mainly as a consequence of the second oil
shock and higher unemployment public expenditure in 1980 rose
by 8 per cent.