The Sustanability of Public Finance in New Members States of European Union

Adrian INCEU, Eugenia Ramona MARA, Anamaria LUNGU, Paul ZAI

Abstract


The issue of public finance sustainability is very important for all EU member states in the actual context after the economic crisis. This article makes an analysis of the sustainability of public finances for the new member states (which joined EU in 2004 and 2007). Firstly, we try to analyze the impact of the economic crisis on public finances sustainability. The sustainability of public finances can be reflected through the level of public debt and budget deficit for a country. For this reason the article presents the evolution of budget deficits for NMS 12 before and after the recent economic crisis. Based on the econometric regression the correlation between economic growth rate (indicator used for measuring the economic evolution) and the budget deficit is revealed. Results for Romania and NMS 12 are quite similar; fact that tells us that the status of public finances is following the same trend in Romania as in the NMS 12.


Keywords


sustainability, economic crisis, EU member states, public finances, public debt, public deficit

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