Local-government debts might double that proportion, but China plainly has enough fiscal space to recapitalise any bank threatened with insolvency.

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There will be less fiscal and monetary space for remedial measures, Lin said.

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Rock-bottom interest rates mean that, economically, there is theoretically space for more expansionary fiscal policy.

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According to Mike Gold of Bigelow Aerospace, a firm that hopes to build inflatable space habitats, such fiscal rectitude has been met with criticism from a surprising quarter: Republican politicians.

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Under a dual-currency system, member countries would continue to enjoy the benefits of the euro while increasing their maneuvering space to drive monetary and fiscal policy on a local basis.

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"In the event of a significant downside scenario, the economy has sufficient policy space to respond, especially on the fiscal side, " the IMF said in a report on the Asian economy.

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