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Fiscal Foundation of Convergence to European Union in Pre-Accession Transition Countries

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Author Info
Halpern, László
Neményi, Judit

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Abstract

Pre-Accession Transition Countries (PATCs) aim at early admittance to the monetary club. Their fiscal indicators ? deficit and debt - do not show any serious symptoms. Closer scrutiny reveals, however, that the interest burden of their public debt might be underestimated, and that restructuring and unavoidable fiscal transparency may increase their debt significantly. All in all about 1 per cent primary surplus might be sufficient to remain on the safe side of their debt in the medium run. According to the estimated model the fiscal adjustment is driven by the external imbalance, the monetary conditions are determined by the fiscal stress and their growth is affected by fiscal and monetary stimuli. -- Die fiskalpolitischen Grundlagen für die Konvergenz der Transformationsländer hin zur Europäischen Union. Die Transformationsländer wollen möglichst schnell dem monetären Club beitreten. Ihre fiskalischen Indikatoren ? Defizite und Verschuldung ? weisen nicht auf ernsthafte Symptome für Probleme hin. Eine nähere Betrachtung zeigt jedoch, dass die Zinslast ihrer öffentlichen Verschuldung möglicherweise unterschätzt wird und dass eine Restruktierung im Zusammenhang mit einer unvermeidlichen fiskalischen Transparenz die Verschuldung beträchtlich ausweiten wird. Insgesamt wird ein Primärüberschuss von etwa 1 Prozent ausreichend sein, um in der mittleren Frist bei der Verschuldung auf der sicheren Seite zu sein. Nach dem geschätzten Modell wird die fiskalpolitische Anpassung durch das aussenwirtschaftliche Ungleichgewicht bestimmt, die monetären Bedingungen werden durch den fiskalischen Druck determiniert und das Wachstum wird durch fiskalische und monetäre Impulse beinflusst.

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Publisher Info
Paper provided by Deutsche Bundesbank, Research Centre in its series Discussion Paper Series 1: Economic Studies with number 2002,03.

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Date of creation: 2002
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Handle: RePEc:zbw:bubdp1:4168

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Related research
Keywords: fiscal adjustment; monetary conditions; EU integration of transition countries;

Find related papers by JEL classification:
F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization

Cited by:
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  1. Erdem Basci & M. Fatih Ekinci & Murat  Yülek, 2004. "On Fixed and Variable Fiscal Surplus Rules," IMF Working Papers 04/117, International Monetary Fund. [Downloadable!]
    Other versions:
  2. I.S. Meister, 2002. "Is Eastern Europe ready for the Euro? A Cointegration Analysis for the Maastricht Criteria," WO Research Memoranda (discontinued) 699, Netherlands Central Bank, Research Department. [Downloadable!]
  3. Dalia Grigonyté, 2003. "Impact of Currency Boards on Fiscal Policy in Central and Eastern European Countries," Economic Change and Restructuring, Springer, vol. 36(2), pages 111-133, June. [Downloadable!] (restricted)
  4. Nikolay Nenovsky & Kalina Dimitrova, 2002. "Dual Inflation Under the Currency Board: The Challenges of Bulgarian EU Accession," William Davidson Institute Working Papers Series 487, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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This page was last updated on 2009-12-2.


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