En zone euro, la "dette publique" n'existe pas. Justification théorique de la proposition d'annulation des "dettes publiques" par l'Eurosystème (In the Euro Zone, There Is No Such Thing as 'Public Debt'. Rationale for ECB's 'Public Debt' Cancellation)

2021 ◽  
Author(s):  
Baptiste Bridonneau
Author(s):  
Izabela Zawiślińska

Public debt and the increasing indebtedness of states is not a new phenomenon even in the context of bankruptcy of state. In the past we have already experienced internal and external state insolvency. What causes today’s increase in preoccupation with external bankruptcy, except for global dimension of debt, is a change in its structure. An increasing number of states uses foreign debt to finance budget and trade imbalances. This tendency is observed among developing as well as developed states, including Economic and Monetary Union member states. The increase in external debt is in large part caused by privet debt which in certain circumstances is transferred to state. The level of total external debt of many Euro Zone member states in relation to GDP is much higher than the level of public debt. These are the reasons that justify the fear for the future of Euro Zone after bankruptcy of some of the member states. What increases the level of fear is the fact that the actions undertaken by European Union and EMU do not cause expected results and therefore cannot be judged positively. Paradoxically, some of them have only political and PR dimensions. Politicians may brag about their resolve to defend the once adopted solutions and markets may remain in their illusion that the present situation is only temporary. How long will it last? Last actions seem to be just a game designed to gain some more time to prepare different solutions such as fundamental and subjective restructuring of Euro Zone and – who knows? – maybe even of the European integration as such. The words of European Central Bank president Mario Draghi (August 2, 2012) stressing the fact that there’s no turning back from the Euro and that he is going to defend the common currency need to be understood in that context. The belief in the solidarity of states and optimistic outlook for the future should not result in such dramatic and desperate words.


2021 ◽  
Vol 21 (3) ◽  
pp. 119-127
Author(s):  
Roman Plyusnin ◽  

The 2008–2009 crisis and the subsequent euro zone crisis dealt a serious blow to the Finnish economy. 2009 was marked by a significant reduction in the country's GDP, an increase in unemployment, and an increase in public debt. In the following years, Finland did not experience stable economic growth, and in 2014, mutual sanctions between Russia and the EU made their contribution. It was only in 2016 that the country began its systematic return to its pre-crisis state. Finnish municipalities bordering Russia since the 1990’s. the twentieth century is the least economically developed part of the country, which at the same time is most closely connected with our country due to its geographical location. In this regard, in this article, the author considered the economic situation of these municipalities on the basis of available official statistics. It was found that the dynamics of the considered indicators most often correlate with what was happening in the country as a whole. In 2014–2015, no special negative consequences from counter-sanctions on the part of our country were revealed. The exception was the indicators related to the service sector of border municipalities, which in 2014–2015 were noticeably worse than the average for Finland.


2021 ◽  
Vol 0 (0) ◽  
pp. 1-24
Author(s):  
Ada-Cristina Albu ◽  
Lucian-Liviu Albu

In this paper we propose to analyze the dynamic of the relation between public debt and economic growth rate for Euro area countries by employing a wavelet approach, establishing thus both short-term and long-term correlations between these two variables. In this way we will present time-frequency dependencies between debt and economic growth and differentiate between short term and long-term effects. High levels of public debt have a negative impact on the economic output, because they entail concerns about debt sustainability. Non-linear analysis of the debt-growth nexus shows the existence of thresholds from which rising indebtedness can hamper economic growth. Using wavelet analysis, we demonstrate that there is a strong relation between public debt and economic growth, especially for high frequencies, public debt having a significant impact on economic growth in case of periods situated above 2 years for most Euro Zone member states. High debt levels can cause serious effects on fiscal stability and therefore require fiscal consolidation in order to restore economic growth. Therefore, Euro Zone member states should implement prudent debt policies and establish clear limits for debt increase, in order to comply with fiscal sustainability and ensure conditions for preserving economic growth.


2021 ◽  
Vol 20 (Issue Vol 20, No 2 (2021)) ◽  
pp. 233-245
Author(s):  
Gerhard LECHNER

In the non-academic sector in Germany, it is often advocated that the expansion of the ECB’s money supply would inevitably lead to high inflation or even hyperinflation. This paper explores the question of whether inflation could arise in the euro zone, if so how high it would be and whether it would be hyperinflation. The work is based on theoretical considerations on the subject of hyperinflation and inflation and outlines a possible scenario in which the latter could actually become a reality. The thesis is that the greatest danger to the euro zone would come if Italy and / or Spain chose to leave the Union. Covid-19 has increased the risk of divergent economic developments in different countries in the euro zone. Italy and Spain have to reckon with a dramatic increase in public debt, weak growth and deteriorating conditions on the labour market. The main risk is unlikely to be that the euro zone will not help Italy or Spain, but the people in these countries may feel that aid is not enough, thus making an exit a serious option. If these countries left the Eurozone, then they would likely opt for an orderly exit. That means Italy would join EMS II after a one-time devaluation and not leave the EU. If the exit was not negotiated, then a disorderly parting would commence, which is the scenario with a high risk of hyperinflation.


Author(s):  
Lauric NGOUEMBE ◽  
Jean-Anaclet Mampassi

This study, through temporal data and the ARDL process, examined the effects of the cancellation of external public debt on economic growth in the Republic of Congo over the 1990 to 2016 period. From this review, it appears that debt cancellation has a positive impact on economic growth over the short-term and a negative impact over the long term. Beyond these results, we believe that additional research is needed to examine the channels through which external public debt cancellation influence economic growth in the Republic of Congo.


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