High public debt in the euro area: still a fact

Andreea Stoian and Rui Alves

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we investigate the issues regarding the stabilization of public debt and its decrease down to 60 per cent of GDP for selected European Union countries using the primary balance derived from the public debt dynamic model as a leading indicator. We find that there is a high probability of stabilizing public debt at its 2014 level conditional on achieving an increased GDP growth rate . In addition, results indicate that it would take at least 10 years for many of the analyzed countries to decrease their public debt ratio to 60 per cent of GDP. We also draw conclusions on what really matters for fiscal sustainability and on implications for national and European fiscal policies.

Keywords: Fiscal policy; primary balance; public debt; fiscal sustainability; European Union (search for similar items in EconPapers)
JEL-codes: E62 E63 H62 (search for similar items in EconPapers)
Date: 2014-02
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:63679

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