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

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  • Karsten Staehr

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Abstract

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

Suggested Citation

  • Karsten Staehr, 2010. "The global financial crisis and public finances in the New EU Countries from Central and Eastern Europe," Bank of Estonia Working Papers wp2010-02, Bank of Estonia, revised 04 Feb 2010.
  • Handle: RePEc:eea:boewps:wp2010-02
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    Cited by:

    1. Juan Carlos Cuestas & Karsten Staehr, 2013. "Fiscal shocks and budget balance persistence in the EU countries from Central and Eastern Europe," Applied Economics, Taylor & Francis Journals, vol. 45(22), pages 3211-3219, August.
    2. Ayala, Astrid & Blazsek, Szabolcs, 2013. "Structural breaks in public finances in Central and Eastern European countries," Economic Systems, Elsevier, vol. 37(1), pages 45-60.
    3. Stanova, Nadja, 2015. "Fiscal discretion, growth and output volatility in new EU member countries," MPRA Paper 63946, University Library of Munich, Germany.
    4. Lupu, Iulia, 2010. "Budget Deficit And Public Debt - The Great Challenges For The Eu Member States," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 14(4), pages 140-149.
    5. Jarko Fidrmuc & Caroline Klein & Robert W. R. Price & Andreas Wörgötter, 2013. "Slovakia: A Catching Up Euro Area Member In and Out of the Crisis," OECD Economics Department Working Papers 1019, OECD Publishing.
    6. Jaan Masso & Kerly Espenberg, 2013. "Early application of fiscal austerity measures in the Baltic states," Chapters,in: Public Sector Shock, chapter 3, pages 84-133 Edward Elgar Publishing.
    7. Jaan Masso & K. Espenberg & Anu Masso & I. Mierina & Kaia Philips, 2013. "GINI Country Report: Growing Inequalities and their Impacts in the Baltic States Estonia, Latvia, Lithuania," GINI Country Reports baltics, AIAS, Amsterdam Institute for Advanced Labour Studies.
    8. Jaanika Merikull & Tairi Room & Karsten Staehr, 2013. "Perceptions of unreported economic activities in Baltic Firms. Individualistic and non-individualistic motives," Bank of Estonia Working Papers wp2012-8, Bank of Estonia, revised 04 Feb 2013.
    9. repec:eee:ecosys:v:41:y:2017:i:3:p:367-378 is not listed on IDEAS
    10. Pop, Napoleon & Milea, Camelia & Lupu, Iulia & Criste, Adina & Ailinca, Alina Georgeta & Iordache, Floarea & Rotaru, Alina, 2011. "Measures To Recalibrate The Macroeconomic Policies In The New Eu Member States That Are To Adopt The Single Currency," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 15(1), pages 171-189.

    More about this item

    Keywords

    global financial crisis; fiscal policy; budget reaction functions; Central and Eastern Europe;

    JEL classification:

    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects

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