We study simple fi scal rules for stabilizing the government debt level in response to asymmetric demand shocks in a country that belongs to a currency union. We compare debt stabilization through tax rate adjustments with debt stabilization through expenditure changes. While rapid and fl exible adjustment of public expenditure might seem institutionally or informationally infeasible, we discuss one concrete way in which this might be implemented: setting salaries of public employees, and social transfers, in an alternative unit of account, and delegating the valuation of this numeraire to an independent fi scal authority.Using a sticky-price DSGE matching model of a small open economy in a currency union, we compare the business cycle implications of several different fi scal rules that all achieve the same reduction in the standard deviation of the public debt. In our simulations, compared with rules that adjust tax rates, a rule that stabilizes the budget by adjusting public salaries and transfers reduces fl uctuations in consumption, employment, and private and public after-tax real wages, thus bringing the market economy closer to the social planner's solution.