Abstract
European crisis affected financial sustainability of Monetary Union countries negatively. Union countries are trying to alleviate the short term effects of the crisis on policy implementation. Whether union countries will ride out the crisis with short term policies can be examined by investigating their financial sustainability. The aim of this study was to examine the European Monetary Union member countries' financial viability. For this aim we use a balanced panel covering EMU 12 countries (Austria, Belgium, Finland, France, Germany, Luxemburg, Ireland, Portugal, Netherlands, Italy, Greece, Spain) over the period 1995-2011. We analyzed the relationship between debt/GDP and primary surplus for panel causality covering EMU 12 countries. The results of the panel co-integration tests revealed that the variables are co-integrated. In other words there is statistically significant long-run relationship among the variables.
Highlights
The sustainability of growth and stability are important issues as well as economic growth and stability
As a result of the study, it can be seen that both primary surplus and debt/output series are not stationary
It can be said that sustainability does not exist for union countries
Summary
The sustainability of growth and stability are important issues as well as economic growth and stability. The realization of macroeconomic stability or growth alone is not enough. In this context, crisis effects that are suppressed by expansionary or contractionary policies in times of crisis continued in the post-crisis period. H. Yildiz / SJM 9 (1) (2014) 59 - 70 euro area countries. Yildiz / SJM 9 (1) (2014) 59 - 70 euro area countries Discretionary measures adopted to compensate for declining private demand in the economy had an adverse impact on fiscal positions (ECB, 2011). These costs have a negative impact on financial stability of member countries
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
