scholarly journals Determinants of substantial public debt reductions in Central and Eastern European Countries

Empirica ◽  
2021 ◽  
Author(s):  
Sofia Semik ◽  
Lilli Zimmermann
Keyword(s):  
Public Debt ◽  
Global Financial Crisis ◽  
Probability Model ◽  
Substantial Reduction ◽  
Government Debt ◽  
Eastern European ◽  
Eu Member States ◽  
Eastern European Countries ◽  
The Global Financial Crisis ◽  
Economic Growth Rates

AbstractGovernment debt development is a timeless issue in economics that has gained even more attention in light of the global financial crisis and the Covid 19 pandemic crisis. The following paper uses several specifications of a logistic probability model to examine the key determinants underlying substantial public debt reductions in Central and Eastern European EU Member States for the period 1996–2020. The results suggest that fiscal adjustments are more likely to be successful in reducing public debt if they are based on expenditure cuts rather than revenue increases. In this context, cuts in social benefits and government employee compensation prove to be particularly effective. In addition, favourable economic growth rates increase the probability of a substantial reduction in government debt.

scholarly journals External financing in Central and Eastern European countries after the global financial crisis

2020 ◽  
Author(s):  
Ewa Bilewicz
Keyword(s):  
Global Financial Crisis ◽  
Balance Of Payments ◽  
Capital Inflows ◽  
European Countries ◽  
Eastern European ◽  
External Financing ◽  
Large Drop ◽  
Financial Account ◽  
Eastern European Countries ◽  
The Global Financial Crisis

The aim of the paper is to analyse changes in the financial account of the balance of payments in 11 Central and Eastern European countries (CEE) during the years 2007-2017. The analysis comprises changes in the value of the financial account's components. The economic crisis reversed existing tendencies in net capital flows to CEE countries. They transformed from net recipients of capital to providers of capital to the rest of the world. This situation is completely different than the pre-crisis period when CEE countries experienced significant net inflows of mainly direct invest- ment, with capital moving ‘downhill', mostly from richer EU countries. The fall in the surplus on the financial account of the balance of payments was determined mainly by a large drop in net other investments and even their outflow, especially during 2012-2015. The net outflow of capital was also caused by the accumulation of reserves by central banks. In relation to other transactions of the financial account, a slowdown in net capital inflows was recorded. The lowered surplus on the CEE countries' financial balances can have an effect on their external stability, however, they have seen a reemergence of inflows in recent quarters, including in non-FDI flows.

Another look at causes and consequences of pension privatization reform reversals in Eastern Europe

2017 ◽  
Vol 28 (3) ◽  
pp. 224-241 ◽  
Author(s):  
Nikola Altiparmakov
Keyword(s):  
Eastern Europe ◽  
Global Financial Crisis ◽  
Eastern European ◽  
Short Term ◽  
Rates Of Return ◽  
Rational Alternative ◽  
Fiscal Austerity ◽  
Eastern European Countries ◽  
The Global Financial Crisis

In order for ‘carve-out’ pension privatization to improve long-term sustainability, the transition should not be predominantly debt financed, and private pension funds should deliver (net) rates of return tangibly higher than gross domestic product (GDP) growth. We show that none of the reforming countries in Eastern Europe was successful in fulfilling these two preconditions, even before the emergence of the global financial crisis. While existing literature mostly describes a recent wave of reform reversals as politically driven short-sighted policies that deteriorate long-term sustainability, we argue the contrary: that pension privatization structural deficiencies and disappointing performance allow reversals to improve the short-term stance without necessarily undermining long-term pension sustainability. We conclude that unless political consensus exists to support the multi-decade fiscal austerity required to finance pension privatization, reform adjustments and reversals can be a rational alternative to maintaining economically suboptimal or politically unstable pension systems in some Eastern European countries.

scholarly journals Determinanty zmian deficytu budżetu państwa i długu publicznego w krajach Unii Europejskiej w 2010 roku

2012 ◽  
pp. 77-97
Author(s):  
Dariusz Malinowski
Keyword(s):  
Public Debt ◽  
Budget Deficit ◽  
The State ◽  
European Countries ◽  
Eastern European ◽  
State Budget ◽  
Member States ◽  
Eu Member States ◽  
Percentage Points ◽  
Eastern European Countries

The article contains an analysis of the budget deficit variability and public debt variation in the EU in 2010. Comparing the scale and economic determinants of changes in the state budget deficit and public debt in 2010 in the Central and Eastern European EU member states and in other EU countries we reach the following conclusions: 1) The average scale of the improvement of the economic result of the state budget as % of GDP was higher in the Central and Eastern Europe countries comparing to other EU member states. In the first group of countries, economic results improved on average by 1.1 percentage points, and in the other by 0.75 percentage points. 2) In most Central and Eastern European countries, as well as in most other EU countries the decline in budgetary expenditure, expressed in% of GDP was the only or major determinant of the reduction of the economic deficit of the state budget as % of GDP. Reduction of public spending in GDP was in turn the result of reducing the fiscal growth of nominal spending. In the Central and Eastern European countries in 2010, the nominal budget spending, decreased on average by 0.4%, while in 2009 increased on average by 16.1%. 3) In the rest of the EU average increase in public debt as % of GDP was higher than the average increase in public debt in the countries of Central and Eastern Europe. For the rest of the EU member states, public debt at the end of 2010 as % of GDP was by 4.65 percentage points higher than at the end of 2009, and for the Central and Eastern European countries by 4.14 percentage points higher. At the end of 2010 Central and Eastern European countries had significantly lower average level of public debt as % of GDP in comparison with other EU members states (38.9% of GDP and 74.8% of GDP). In most other EU countries there is virtually no limit for increasing the public debt, therefore there is no limit for a high budget deficit. Among Central and Eastern European EU member states only Hungary are in similar situation while Poland is close by. Therefore, most other EU countries and some countries of Central and Eastern Europe must immediately substantially reduce the scale of the economic deficit of the state budget. Countries where public debt is relatively low should not delay further restrictions of the state budget deficit as later on they will have to make this reduction under pressure of time. Above else, high economic deficit negatively impacts the economy, including economic growth. If EU member states fail to implement quickly the low economic state budget defi cit policy, they will plunge into economic recession that will last for many years.

Excessive Credit Growth – An Early Indicator of Financial Instability

2015 ◽  
Vol 2 (1) ◽  
pp. 174 ◽  
Author(s):  
Ela Golemi
Keyword(s):  
Global Financial Crisis ◽  
Eastern European ◽  
Credit Growth ◽  
Early Indicator ◽  
Basel Committee ◽  
Credit Cycle ◽  
Hp Filter ◽  
Eastern European Countries ◽  
The Global Financial Crisis ◽  
Growth Approach

This article discusses the issue of excessive credit growth, which is generally considered as an early indicator of financial and macroeconomic instability. It focuses methods that should be used in order to evaluate if the level of credit growth is excessively enough in order to start applying “countercyclical capital buffer”, a macro prudential tool proposed in the new regulatory framework of Basel Committee on Banking Supervision. Analysis focused in Central and Eastern European countries experiences with credit growth approach before the global financial crisis, show that the HP filter calculation proposed by the Basel Committee is not a suitable indicator of excessive credit growth for converging countries. A broader set of indicators and methods based in economic fundamentals of each country should be employ to determine a country’s position in the credit cycle.

scholarly journals The Global Crisis of the Late 2000s and Currency Substitution: A Study of Three Eastern European Economies Russia, Turkey and Ukraine

2015 ◽  
Vol 4 (2) ◽  
pp. 5-22 ◽  
Author(s):  
Gurkan I. Akalin ◽  
Edmund L. Prater
Keyword(s):  
Foreign Currency ◽  
Global Financial Crisis ◽  
Currency Substitution ◽  
Eastern Bloc ◽  
Eastern European ◽  
Baltic Countries ◽  
The Us ◽  
Us Dollar ◽  
Eastern European Countries ◽  
The Global Financial Crisis

Abstract For the last two decades, most of Eastern European countries moved towards open economies, including Baltic Countries, Ukraine and Russia. Some of these countries adopted the euro such as the case of Montenegro in 2002, Slovakia in 2009, Estonia in 2011, and finally Latvia in 2014. Adoption of the new currency helped these countries further integrate into a larger market, the Eurozone, and stabilize their economies against heavily fluctuating exchange rates. The governments of Ukraine and Russia, on the other hand, did not show interest to join the Eurozone and followed more independent currency policies along with the limited economic liberalization during the period of the 90s and the early 2000s. Similarly, Turkey, not a former Eastern Bloc country, but located geographically very close to these two countries did not peg its currency to the euro or the US dollar. All of these three economies in Eastern Europe had multiple deep financial crises, inflation, devaluations, and weak governments in the last two decades of the 90s and the 2000s (Lissovolik, 2003). For instance, Turkish lira depreciated from 13 TL/$ in 1973 to 1.5 million TL/$ in 2004 (Bahmani-Oskooee, 1996). As a result, of these negative experiences, local people of these countries developed a tendency to keep at least a portion of their savings in a foreign currency (Civcir, 2003). In the case of Turkey, the ratio of reserves held in the foreign currency over the local currency, which is a de facto measure of US dollarization, showed a steady rise during the period from 1983 to 1993, remained steady high around 50% until 2001 and decreased afterwards (Metin-Özcan, 2009). In short, these countries are examples of highly US dollarized countries (Havrylyshyn & Beddies, 2003; Kaplan, 2008). This paper is to investigate the changes in the currency substitution during and after the global financial crisis between 2007 and 2010 in Russia, Turkey and Ukraine. These three countries with large economies, recent strong US dollarization experience in the last two decades, and relatively open markets, provide good cases for understanding the global trend in the currency substitution and the status of the US dollar as a reserve currency

Adapting the European System of Financial Supervision (ESFS) to the EEA Two-Pillar Structure – A Workable Solution?

2019 ◽  
Vol 16 (5) ◽  
pp. 557-591
Author(s):  
Andri Fannar Bergþórsson
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
National Level ◽  
Financial Supervision ◽  
Member States ◽  
Eu Member States ◽  
European System ◽  
Pillar Structure ◽  
The Global Financial Crisis ◽  
The Eu

In response to the global financial crisis, the European System of Financial Supervision (ESFS) was created in 2010. Supranational bodies were established for different financial sectors to act as supervisors of sorts for national-level supervisors in EU Member States. This article focuses on how the system was adapted to three EFTA States that are not part of the EU but form the internal market along with EU Member States through the EEA Agreement – Iceland, Norway and Lichtenstein (EEA EFTA States). The aim is to clarify how ESFS has been incorporated into the EEA agreement and to discuss whether this a workable solution for the EEA EFTA States that have not transferred their sovereignty by name in the same manner as the EU Member States. One issue is whether the adaptation has gone beyond the limits of the two-pillar structure, as all initiative and work stem from the EU supranational bodies and not the EFTA pillar.

scholarly journals La influencia de los textos no vinculantes del Consejo de Europa sobre independencia judicial en el TEDH y en la UE

2021 ◽  
pp. 161
Author(s):  
Rafael Bustos Gisbert
Keyword(s):  
Rule Of Law ◽  
Case Law ◽  
Eastern European ◽  
The European Union ◽  
Council Of Europe ◽  
Eu Member States ◽  
European Court ◽  
Before And After ◽  
Eastern European Countries ◽  
Basic Standards

El artículo examina los documentos elaborados sobre independencia judicial por distintos órganos del Consejo de Europa. Tiene en cuenta la diferente aproximación en los mismos antes y después de la crisis del Estado de Derecho en algunos de los Estados europeos a partir de 2010. Tras resumir los estándares básicos elaborados en tales textos, se estudia su influencia en el Consejo de Europa y en la UE. En el primer sentido se examina su presencia en la jurisprudencia del TEDH. Respecto a la UE se examina el modo en que ha condicionado la labor de la Comisión en la supervisión del respeto al Estado de Derecho por los Estados miembros desde que comenzara a usarlos para evaluar las candidaturas de los países del Este a ingresar en la UE a finales del pasado siglo, hasta su incorporación al Informe sobre el Estado de Derecho en la UE aprobado en octubre de 2020.This essay focuses on the documents on judicial independence drafted by Council of Europe bodies. It takes into account its diverse approaches before and after the rule of Law backsliding in some European States since 2010. The basic standards elaborated are summarized. Its influence is addressed both at the Council of Europe and at the European Unión. In the first sense it examines the influence of this soft law in the European Court of Human Rights case law. Secondly it focuses in the way it has conditioned the European Commission task of monitoring the effectiveness of rule of law in EU member states. This influence began when they were used to evaluate the candidatures of Eastern European countries to join the EU at the end of the last century but it has kept inspiring the Commision’s activities until the Report on Rule of Law issued in October 2010.

Sign in / Sign up

Export Citation Format

Share Document