Asymmetric paths of public debts and of general government deficits across countries within and outside the European monetary unification and economic policy of debt dissolution

Abstract

The aim of this study is to analyze the evolution of public debts and of government deficits/surplus across European countries within and outside the monetary unification. In particular, this study compares the dynamics of public debts and of general government deficits between European countries within and outside the monetary unification for the preceding and subsequent period the introduction of the Euro currency. Statistical analyses show that the evolution of public debts and government deficits/surplus is significantly different between European countries. Nations within the European monetary unification seem to have, from 2001, deteriorated trends of sovereign debts and government deficits in comparison with countries outside the European monetary unification. This dissimilar evolution of public debts and of government deficits between European countries can be due to manifold factors. These asymmetric paths of public debts and of government deficits across European countries may be one of contributing factors that generates uncertain scenarios and negative socioeconomic effects on patterns of growth of the overall European Union economy. A economic policy of debt dissolution is suggested.