Open AccessGOVERNMENT DEBT OF SELECTED EUROPEAN COUNTRIES
Author(s) -
Wioletta Świeboda
Publication year - 2019
Publication title -
knowledge
Language(s) - English
Resource type - Journals
eISSN - 2545-4439
pISSN - 1857-923X
DOI - 10.35120/kij30061569w
Subject(s) - government debt , government (linguistics) , financial crisis , debt , economic policy , deficit spending , unemployment , order (exchange) , economics , sustainable growth rate , debt crisis , business , finance , economic growth , macroeconomics , linguistics , philosophy
The purpose of this paper is to present the main data about general government debt. It is a challenge to analyze selected group of countries because they are very heterogeneous. For instance Belgium is a well-developed “old-EU” country while Spain is one of the southern European countries with specific issues like unemployment and a huge national debt. Poland, on the contrary, had a centrally planned economy, went through the transition to market economy and only subsequently became an EU member. The key point of this research is to explain how they evolved in the years after the crisis. This paper includes an analysis of the evolution of the public budget of each government.It was fundamental to implement urgent measures and policies, in order to recover the economy of these countries and return to sustainable growth after the 2008 Financial Crisis. A brief overview of these countries’ pensions systems is included, as it has a major share in their government spending and fiscal stability. It is one of the most concerning fiscal issues nowadays that is constantly being in question and probably modified in the short-term.As of 2008, the first symptoms of the international financial crisis began to manifestthemselves in the European countries. As a consequence, European countries like Spain orBelgium suffered a drop in their economic activity and an increase of the unemploymentrate. In the case of Poland, the impact of the crisis was not as dramatic as in other countries,however they also needed to react to the financial deficit.Between the period of 2010 and 2017, the countries needed to make several reformsespecially concerning the national Value Added Tax, and restructuring the provision ofcertain public services such as health funding, infrastructure, education and employment. General government debt-to-GDP ratio is the amount of a country's total gross government debt as a percentage of its GDP. It is an indicator of an economy's health and a key factor for the sustainability of government finance. "Debt" is commonly defined as a specific subset of liabilities identified according to the types of financial instruments included or excluded. The evolution of public debt and the government surplus/deficit among the years, helps to picture how was the country economy situation before the Financial Crisis and therefore helps to understand why the consequences are in some cases more extreme and dramatic than other.