In the European context tax rates are high and government expenditure is focused on current expenditure. A 'good' consolidation is one where taxes are lower and the lower government expenditure is on infrastructures and other investments.

In this quote, Mario Draghi discusses the balance between tax rates and government expenditure in the European context. He points out that tax rates in Europe tend to be high, and government spending is often focused on current expenditure, which includes things like social benefits and day-to-day operating costs. Draghi suggests that a "good" economic consolidation—a process of reducing budget deficits—would involve lowering taxes and shifting government spending from consumption to more productive areas like infrastructure and investments. This approach, according to Draghi, would help stimulate economic growth and improve long-term financial stability.

Draghi’s statement underscores his belief in the importance of fiscal policy that encourages both economic growth and investment. By advocating for lower taxes and a reallocation of government spending towards infrastructure, Draghi is suggesting that governments should focus on building the foundations for future prosperity rather than relying on short-term fixes. Investments in infrastructure and long-term projects not only contribute to immediate economic activity but also enhance productivity in the future.

The origin of this quote lies in Draghi's role as President of the European Central Bank (ECB) and his involvement in shaping European economic policy. Draghi was instrumental in navigating the Eurozone crisis and formulating policies aimed at stabilizing the European economy. His views on fiscal consolidation reflect his belief in a balanced approach that combines prudent financial management with strategic investments that lay the groundwork for sustained economic growth.

Ultimately, Draghi’s quote advocates for a shift in focus from short-term fiscal restraint to long-term economic investment. He emphasizes the need for a balanced fiscal policy that not only reduces budget deficits but also ensures that government spending contributes to future growth and infrastructure development, which will benefit society as a whole in the long run.