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The global financial crisis and public finances in the New EU Countries from Central and Eastern Europe

  • Karsten Staehr


This paper discusses the public finances of the 10 new EU Countries from Central and Eastern Europe, with particular emphasis on the effects of the global financial crisis that started in 2008. The budget outcomes have differed markedly across the new EU countries, both before and during the crisis. The direct impact of the crisis on public finances was limited, but the severe downturns have strained public finances and increased debt ratios considerably. Estimations of budget reaction functions reveal that the budget balance has, in general, been moderately counter-cyclical, but also that the counter-cyclicality derives entirely from the revenue side. The medium-term fiscal outlook rests, to a large extent, on growth prospects. The uncertainties regarding future economic

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Paper provided by Bank of Estonia in its series Bank of Estonia Working Papers with number wp2010-02.

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Date of creation: 04 Feb 2010
Date of revision: 04 Feb 2010
Handle: RePEc:eea:boewps:wp2010-02
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  9. Christophe Kamps & Nadine Leiner-Killinger & Reiner Martin, 2009. "The cyclical impact of EU cohesion policy in fast growing EU countries," Intereconomics: Review of European Economic Policy, Springer, vol. 44(1), pages 23-29, January.
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  12. Gaston Gelos & Robert Rennhack & James P Walsh & Pelin Berkmen, 2009. "The Global Financial Crisis - Explaining Cross-Country Differences in the Output Impact," IMF Working Papers 09/280, International Monetary Fund.
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