Coordination in the EU before the government- debt crisis

2014 ◽  
pp. 65-81
Keyword(s):  
Debt Crisis ◽  
Government Debt ◽  
The Government ◽  
The Eu

scholarly journals Sustainable Visual Analysis for Bank Non-Performing Loans and Government Debt Distress

2019 ◽  
Vol 12 (1) ◽  
pp. 131 ◽  
Author(s):  
Li Liu ◽  
Yumin Liu ◽  
Jong-Min Kim
Keyword(s):  
Visual Analysis ◽  
Debt Crisis ◽  
Government Debt ◽  
Functional Principal Component Analysis ◽  
Eu Countries ◽  
Brics Countries ◽  
Debt Markets ◽  
The Government ◽  
The Impact ◽  
The Eu

This article visualizes bank non-performing loans (NPLs) and government debt distress data integration and an outcome classification after the outbreak of European sovereign debt. Linear and functional principal component analysis (FPCA) and biclustering are used to show the clustering pattern of NPLs and government debt for 25 EU and BRICS countries (Brazil, Russia, India, China and South Africa) during the period of 2006 to 2017 through high-dimensional visualizations. The results demonstrate that the government debt markets of EU countries experienced a similar trend in terms of NPLs, with a similar size of NPLs across debt markets. Through visualization, we find that the government debt and NPLs of EU and BRICS countries increased drastically after the crisis, and crisis countries are contagious. However, the impact of the Greek debt crisis is lower for non-crisis countries, because the debt markets of these countries are decoupled from the Greek market. We also find that sovereign debtors in the EU countries have much closer fiscal linkages than BRICS countries. The level of crisis in the EU countries will be higher than that in the BRICS countries if crisis is driven by the common shocks of macroeconomic fundamentals.

scholarly journals A Discussion on the European Debt Crisis by Fiscal Sociology

2013 ◽  
Vol 2 (4) ◽  
pp. 37-48
Author(s):  
Chia-Jen Chang ◽  
Chia-Jung Chung
Keyword(s):  
Economic Theory ◽  
Labor Market ◽  
International Business ◽  
Debt Crisis ◽  
Government Debt ◽  
Fiscal Sociology ◽  
Neoclassical Economic Theory ◽  
European Debt Crisis ◽  
The Government ◽  
Austerity Policy

The purpose of this article is that discuss the reasons of European debt crisis. Every European country adopts austerity policy, which cannot solve government debt problems and further lead to economic exacerbation and continuous recession, based on the neoclassical economic theory. In order to realize the root of European debt crisis, this article adopts the reaseach method of fiscal sociology. In this study, we think that the government debt problem is the result of economic profits conflict based on the Fiscal Sociology. The economic profits conflict of investment, consumption, international business and labor market will have influence on the government’s revenue and expenditure. Furthermore, the root of the European debt crisis is the uneven income distribution by financialization and neoliberalism.

The crisis in Greece and the EU-IMF rescue package: Determinants and pitfalls

2012 ◽  
Vol 62 (1) ◽  
pp. 15-39 ◽  
Author(s):  
Anna Visvizi
Keyword(s):  
Sovereign Debt ◽  
Debt Crisis ◽  
Free Market ◽  
Interesting Case ◽  
Sovereign Debt Crisis ◽  
Missed Opportunities ◽  
The Public ◽  
The Government ◽  
Free Market Reforms ◽  
The Eu

The sovereign debt crisis in Greece represents a very interesting case in which the Greek government succeeded in transforming domestic fiscal deficit problem, overspending and fear of free market reforms into a European challenge consistent with justifiable concerns about the sustainability of the euro-project and its likely future. In this paper, the roots of the crisis and the way of addressing it are discussed. In particular the features, drawbacks, missed opportunities and pitfalls of the €110 billion EU/IMF rescue package granted to Greece are examined. It is argued that the government’s focus on taxation rather than on politically costly privatization and cutbacks in the public sector undermined economic activity in the country, decreased the government’s revenue, and spawned disincentives for investment, without generating growth and without improving competitiveness. In brief, rather than contributing to economic recovery, the opposite was achieved as a result of the measures implemented by the government.

scholarly journals DEBT POLICY IMPLEMENTATION IN EU COUNTRIES: LESSONS FOR UKRAINE

2018 ◽  
pp. 7-19
Author(s):  
Ihor LYUTY ◽  
Yuliia TERES
Keyword(s):  
Public Debt ◽  
Negative Impact ◽  
Debt Crisis ◽  
Government Debt ◽  
Debt Management ◽  
Social Spending ◽  
The European Union ◽  
Eu Countries ◽  
Debt Policy ◽  
The Eu

Introduction. The implementation of debt policy in the EU countries is associated with a range of problems, in particular, rising social spending, and increasing budget deficits. In recent years, Member States have had a negative impact on the debt crisis, which is primarily due to unbridled fiscal policies of individual countries and the banking crisis. Purpose. The article is devoted to issues of implementation of debt policy in the EU countries and the problems of overcoming the consequences of the debt crisis, which began in 2008 and extends to today. An estimation of the possibilities of using this experience in Ukraine is made considering the fact that the country is on the verge of a debt crisis. Results. It has been determined that the sovereign debt crisis is a crisis of confidence for the EU, in particular the euro zone. This required adjusting both the socio-economic and financial policies of the EU. It can be argued that the Stability and Growth Pact did not take place and that now Europe needs to form a qualitatively new budget system that could more effectively cope with the adverse economic consequences or even the failure of a Member State to fulfill its obligations. It has been determined that one of the main items of budget expenditures of the European Union countries is government debt service costs. Public debt management, above all, is carried out through government debt securities. There is a tendency to reduce the share of shortterm public debt and increase the long-term, which provides reduction of budget expenditures for servicing public debt. In particular, in some EU countries there are strict rules that determine the conditions for external borrowing, for example, new loans should not exceed the annual amounts of debt to be repaid. Conclusions. It has been established that a number of measures have been implemented in the EU countries to address the consequences of the debt crisis, in particular: diversification of sources of state debt financing and optimization of terms of circulation of government debt securities; fiscal consolidation; increase maturity of debt obligations and optimize the structure of the public debt portfolio. It is concluded that the measures taken by the EU countries to overcome the consequences of the debt crisis may be useful for Ukraine and, in fact, is a step-by-step guide for the presentation of crisis phenomena, taking into account positive and negative experiences.

scholarly journals Clustering Analysis of Risk Divergence of China Government’s Debts

2021 ◽  
Vol 2021 ◽  
pp. 1-9
Author(s):  
Tianhao Ouyang ◽  
Xiaoyong Lu
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Clustering Algorithm ◽  
Central Government ◽  
Debt Crisis ◽  
Government Debt ◽  
Growth Data ◽  
Difficult Time ◽  
The Government ◽  
The Impact

It is a difficult time for the world’s economics while the impact of COVID-19 is undergoing. A possible worldwide sovereign debt crisis could emerge, in short term, for supply chains blockage due to its slowing-down in many countries. China, having the second largest economy in the world, is crucial for the stability and sustainability of the economic recovery. China endures a long-term growth since 2000; nevertheless, a large amount of that growth is contributed by the government debt, which was spent on infrastructures. The accumulation of debts is a potential risk to the future growth of China. This research evaluates the central government and local government debts with a series of indicators. The weights of indicators are determined by objective methods of the CRITIC approach. Results confirm that the central government debt of China is on the edge of risk, while the risk of local governments debt is already in a concerning danger. The local government risk is 50% higher than the central government’s risk. Moreover, the K-means clustering algorithm performed on data, collected from various provinces, suggests that the local government debts of China follow a pattern of geographical distribution; that is, the closer to the coast, the lesser the risk, which is in accordance with the pattern of labor flowing. Labors are attracted by job opportunities which lie in the well-developed regions of China. This is confirmed by the crosscheck with the wage growth data. This indicates that the less developed areas of China rely more heavily on debt-investment stimulation that could be of a potential stagnation because the yield of investment follows diminishing marginal returns and the relative lacking labor weakens the potential economic growth.

Међузависност ризика неплаћања јавног дуга и солвентности земаља чланица монетарне уније // The Correlation between the Risk of Default and Solvency of Member States of the Monetary Union

2018 ◽  
Vol 13 (23) ◽  
pp. 69
Author(s):  
Бранка Топић-Павковић
Keyword(s):  
Interest Rates ◽  
Monetary Union ◽  
Public Debt ◽  
Debt Crisis ◽  
Causal Connection ◽  
Member States ◽  
Government Bonds ◽  
The Public ◽  
The Government ◽  
The Eu

Резиме: Дужничка криза у земљама Европске монетарне уније истакла је значај вођења одговорне фискалне политике, посебно у оквиру питања одрживости јавног дуга и солвентности земаља чланица. Општа правила за контролу нивоа јавног дуга, уведена у ЕУ, предвиђају обавезујуће мјере за све чланице када њихов јавни дуг пређе границу од 60% БДП-а, као и правила о максималном износу удјела дефицита у БДП-у. Интензитет дужничке кризе одређен је повјерењем инвеститора које зависи од економских фундамената, али и процјене да ли ће влада досљедно измиривати своје обавезе. Циљ истраживања јесте да утврдимо да ли је однос дуга према БДП-у позитивно корелисан са кретањем каматних стопа на државне обвезнице и да одредимо степен њихове повезаности. На узорку од 17 земаља чланица ЕМУ и временским интервалима преткризног и кризног периода, корелационом и регресионом анализом указујемо на узрочно-посљедичну повезаност наведених индикатора и њихов утицај на солвентност земље. Резултати показују да се у случају кризе јавног дуга услијед повећања каматних стопа на дугорочне државне обвезнице, значајно повећава удио јавног дуга у БДП-у што води расту ризика неплаћања дуга и посљедично несолвентности земаља чланица. Фискални аспект интеграције БиХ, посматрани кроз призму фискалних критеријума ЕУ, показују минимална одступања од референтних вриједности. Међутим, имајући у виду да кретање нивоа јавног дуга, те његово сервисирање, директно зависе од степена повећања/смањења БДП-а, извоза и расположивог прихода за сервисирање дуга, одлуке о даљем задужи- вању морају бити повезане са производним пројектима или финансирањем пројеката који ће допринијети даљем привредном расту и расту конку- рентности.Summary: The debt crisis in the European Monetary Union, emphasized the importance of keeping a responsible fiscal policy, especially in the context of issues of public debt sustainability and solvency of the member countries. Common rules for control of the public debt was introduced in the EU provide for mandatory measures for all Member States when their public debt exceeds the limit of 60% of GDP, as well as rules on the maximum amount of deficit percentage of GDP. The intensity of the debt crisis is determined by the confidence of investors, which depends on economic fundamentals as well as assessing whether the government will consistently meet their obligations. The aim of the research is to determine whether the ratio of debt to GDP positively correlated to movements in interest rates on government bonds and to determine the degree of their coherence. In a sample of 17 EMU member countries and time periods pre-crisis and crisis period, correlation and regression analysis indicate a causal connection between these indicators and their impact on the solvency of the country. Results show that in the event of a crisis in public debt due to the increase in interest rates on long-term government bonds, significantly increasing the share of public debt in GDP, which increases the risk of non-payment of debt and consequent insolvency of member states. Fiscal aspect of integration of BiH observed through the prism of fiscal criteria of the EU show a minimum deviation from the reference value, however, given that the movement of the public debt servicing is directly dependent on the degree of increase/decrease of GDP, exports and disposable income to service the debt, decisions on further borrowing must be associated with manufacturing projects or production projects that will contribute to further economic growth and competitiveness.

scholarly journals OPTIMAL FISCAL AND MONETARY POLICY, DEBT CRISIS, AND MANAGEMENT

2017 ◽  
Vol 23 (3) ◽  
pp. 1166-1204 ◽  
Author(s):  
Cristiano Cantore ◽  
Paul Levine ◽  
Giovanni Melina ◽  
Joseph Pearlman
Keyword(s):  
Debt Crisis ◽  
Government Debt ◽  
Risk Premia ◽  
Fiscal Rules ◽  
Short Term ◽  
The Government ◽  
High Level ◽  
The Cost ◽  
Fiscal And Monetary Policy

The initial government debt-to-gross domestic product (GDP) ratio and the government's commitment play a pivotal role in determining the welfare-optimal speed of fiscal consolidation in the management of a debt crisis. Under commitment, for low or moderate initial government debt-to-GDP ratios, the optimal consolidation is very slow. A faster pace is optimal when the economy starts from a high level of public debt implying high sovereign risk premia, unless these are suppressed via a bailout by official creditors. Under discretion, the cost of not being able to commit is reflected into a quick consolidation of government debt. Simple monetary–fiscal rules with passive fiscal policy, designed for an environment with “normal shocks,” perform reasonably well in mimicking the Ramsey-optimal response to one-off government debt shocks. When the government can issue also long-term bonds—under commitment—the optimal debt consolidation pace is slower than in the case of short-term bonds only, and entails an increase in the ratio between long- and short-term bonds.

scholarly journals THE EUROPEAN UNION NORTH–SOUTH DIVIDE AND THE FUTURE OF THE EURO

2013 ◽  
pp. 134-140
Author(s):  
M. M. Khmelnitskiy
Keyword(s):  
Debt Crisis ◽  
Trade Deficit ◽  
The European Union ◽  
The Future ◽  
International Specialization ◽  
Lost Decade ◽  
The Government ◽  
The Moment ◽  
Expert Community ◽  
The Eu

The debt crisis is continuing in the eurozone, putting on agenda a question about the future of the euro and European integration. In 2012 none of the Southern European states could achieve the EU average GDP per capita. If the Greece’s GDP reduces in 2013 by 4,5% as expected, the Government will hardly fulfill its objective to achieve the growth in 2014. Moreover, Europe has become divided into two macroregions: poor South and prosperous North. The differences between them seem to be predefined because of specific EU policy during the creation of the economic union and when the euro was being introduced; these differences are one of the main causes of the crisis. Inspite of the fact that the Southern countries are still in economic decline, the Northern counties are insisting on austerity measures without any plans to reindustrialize Greece, Spain and Portugal in perspective. The «troika» of lenders saved the eurozone on account of multi-billion aid but it is still nothing done to cope with existing political and economic contradictions such as: trade deficit between «North» and «South», dependence on exports, specific international specialization of Greece, Spain and other countries. Three scenarios can be worked out to foresee the situation in the EU: optimistic, pessimistic and neutral. The pessimistic scenario was widely spread in the expert community. However, it is not that popular at the moment. A strong political will is needed to realize the optimistic scenario in the EU, mainly that of Germany and the Netherlands. At the moment the occasions meet the neutral scenario. It means that the euro area still exists but the coming years can become a «lost decade».

scholarly journals Assessment of government debt security of emerging markets: theory and practice

2020 ◽  
Vol 17 (1) ◽  
pp. 35-48
Author(s):  
Viktoriia Koilo ◽  
Lyudmila Ryabushka ◽  
Tatiana Kubakh ◽  
Jaroslav Halik
Keyword(s):  
Emerging Markets ◽  
Government Debt ◽  
Theory And Practice ◽  
Debt Management ◽  
Security Assessment ◽  
New Members ◽  
Management Reform ◽  
Debt Security ◽  
The Government ◽  
The Eu

This study came to inspect a new approach to the government debt security assessment based on the systematization of indicators in terms of four directions: solvency, liquidity, domestic indebtedness, and external indebtedness. The proposed methodology considers the weaknesses, which negatively affect the level of government debt security. It was established that in 2014−2016 the level of security at emerging markets was the worst. The main reason was insufficient solvency. Also, the obtained results showed that the general assessment of domestic indebtedness in recent years had a more dangerous level than the external one. In addition, it was revealed that similar problems with the level of debt burden are also presented in the EU countries since the value of the analyzed indicator – general government debt to GDP – exceeds 60%. It is recommended to consider the experience of debt management reform of new members of the EU and, at the same time, post-socialist countries by other emerging economies.

How Should Slovenia Design Fiscal Policies in the Government Debt Crisis?

2016 ◽  
Vol 52 (7) ◽  
pp. 1562-1573 ◽  
Author(s):  
Dmitri Blueschke ◽  
Klaus Weyerstrass ◽  
Reinhard Neck
Keyword(s):  
Debt Crisis ◽  
Government Debt ◽  
Fiscal Policies ◽  
The Government
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