PL EN


2011 | 10 | 21-38
Article title

PUBLIC FINANCE SUSTAINABILITY IN EUROPEAN UNION COUNTRIES (Nierównowaga finansów publicznych w krajach Unii Europejskiej)

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Languages of publication
PL
Abstracts
EN
The article aims to estimate the current level of public finance sustainability in the European Union, taking into account the starting fiscal position, the possibility of withdrawing fiscal impulses, the future costs of population aging, and possible financial market responses. The author achieves this objective by using an indicator method similar to that used by the European Commission. However, this method has been modified by diversifying projected GDP growth rates and public debt interest rates, Gajewski says. The assumption is that the interest rate may vary depending on the response of financial markets to the debt-to-GDP ratio. The author demonstrates that almost all EU countries have lost their medium- and long-term fiscal sustainability. Greece and Ireland appear to be the worst off among the analyzed countries, Gajewski says. Both these economies suffer from a high structural budget deficit and potentially high costs of population aging. Most other countries will also be forced to make strong fiscal adjustments to achieve primary surpluses far exceeding those in the period before the financial crisis. The calculations also show that Sweden, Estonia and Bulgaria boast the highest levels of public finance sustainability in the European Union, the author concludes.
Year
Issue
10
Pages
21-38
Physical description
Document type
ARTICLE
Contributors
  • Pawel Gajewski, Uniwersyetet Lódzki, Katedra Makroekonomii, Lodz, Poland
References
Document Type
Publication order reference
Identifiers
CEJSH db identifier
11PLAAAA099519
YADDA identifier
bwmeta1.element.552e3786-c727-3aea-935e-ec3118930edf
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