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The Roots of the Eurozone Sovereign Debt Crisis: PIGS vs Non-PIGS

Author

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  • Abel L. Costa Fernandes

    () (Faculdade de Economia do Porto and NIFIP, Universidade do Porto, Portugal)

  • Paulo R. Mota

    () (Faculdade de Economia do Porto and NIFIP, Universidade do Porto, Portugal)

Abstract

The main purposes of this paper are twofold: a) to determine if there are significant differences on the determinants of public expenditures and tax revenues between the so-called PIGS and the remaining Eurozone member states; b) to uncover possible explanations for the different situations in which these countries find themselves nowadays. The paper focus on the effects of the cyclical state of the economy on those fiscal variables, and on the actual adherence to the fiscal rules imposed by the Maastricht Treaty. Based on the estimated results we conclude that the anti-cyclical reaction with respect to the unemployment rate is much stronger among non-PIGS. We also find that fiscal rules have, in general, not been followed by those two groups of countries. Moreover, PIGS, in spite of their economic frailties, have tried to emulate the fiscal behavior of their more prosperous Eurozone partners instead of executing more rigorous policies.

Suggested Citation

  • Abel L. Costa Fernandes & Paulo R. Mota, 2011. "The Roots of the Eurozone Sovereign Debt Crisis: PIGS vs Non-PIGS," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(5), pages 631-649, December.
  • Handle: RePEc:voj:journl:v:58:y:2011:i:5:p:631-649
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Francisco Rebelo & Ester Gomes da Silva, 2013. "Export variety, technological content and economic performance: The case of Portugal," Papers in Evolutionary Economic Geography (PEEG) 1310, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2013.
    2. Chung-Fu Lai & Shan-Kai Tsa, 2015. "Diversified Currency Holdings and Exchange Rate Dynamics," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 678-689.
    3. Mikhail Stolbov, 2014. "How Are Interbank and Sovereign Debt Markets Linked? Evidence from 14 OECD Countries, the Euro Area and Russia," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(3), pages 331-348, June.
    4. repec:eee:joecas:v:10:y:2013:i:2:p:94-100 is not listed on IDEAS
    5. Gulbahar UCLER & Hale KIRMIZIOGLU, 2015. "The Reasons of Eurozone Sovereign Debt Crisis and an Empirical Analysis over Permanency of the Crisis," International Journal of Economics and Financial Issues, Econjournals, vol. 5(1), pages 86-96.
    6. repec:wsi:serxxx:v:62:y:2017:i:05:n:s021759081550099x is not listed on IDEAS
    7. Abel L. Costa Fernandes & Paulo R. Mota, 2013. "The Euro Zone Peripheral Countries’ Sovereign Debt Crisis: Also a Case of Non-Mature Democracies?," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(3), pages 291-310, May.
    8. Nadezhda Ivanova, 2014. "Position and perspectives for enhancement of competitiveness in the Southern EU member-states five years after the beginning of the crisis," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 115-129.
    9. Dimitrios Dapontas, 2013. "Saving Euro by Dividing Europe in Multiple OCAs," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 9(2), pages 107-119, April.

    More about this item

    Keywords

    European public finance; Fiscal policy; Fiscal rules;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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