Object of the research – public debt. Aim of the research – to evaluate the Lithuanian public debt, to assess its influence on social expenditure. Objectives of the research: 1. to present the concept of public debt and to discuss the factors, which influence government borrowing needs; 2. to define the debt burden and to determine the effect of public debt on economy; 3. to provide the public debt evaluation criteria; 4. to evaluate the Lithuanian public debt in respect to the situation in the EU countries according to the identified criteria; 5. to determine the impact of the Lithuanian public debt on social expenditure and to compare it with that in other EU countries. Research methods. Analysis and synthesis of scientific literature and legal documents, statistical data collection and analysis methods, comparative analysis, graphical representation techniques, logical analysis, regression analysis. Research results. Part One introduces the concept of public debt, analyzes the factors influencing government borrowing needs, importance of borrowing to economy and structured models of debt burden. Part Two, having analyzed various scientific articles, provides criteria of the public debt evaluation, reasons importance of the public debt composition and presents the assessment model of the impact of public debt on social expenditure. Part Three gives structural and dynamic analysis of the Lithuanian public debt, evaluates the amount of public debt, according to the mentioned criteria for public debt assessment, and discusses the impact of the Lithuanian public debt on social spending and compares with that in other EU countries. The results of research show that the Lithuanian public debt is one of the smallest amounts borrowed by the EU countries, but it is rapidly increasing (during 2004-2010 tripled). Analysis of the impact of the public debt on social expenditure shows that the effect of public debt of health costs is negligible, while growth of public debt has positive impact on the costs of education and social security. Increasing spending for education is evaluated as acceptable, while a nonproportional increase of government expenditure on social security is not considered an effective investment and can cause serious problems in the future management of public debt.
Object of the research – public debt. Aim of the research – to evaluate the Lithuanian public debt, to assess its influence on social expenditure. Objectives of the research: 1. to present the concept of public debt and to discuss the factors, which influence government borrowing needs; 2. to define the debt burden and to determine the effect of public debt on economy; 3. to provide the public debt evaluation criteria; 4. to evaluate the Lithuanian public debt in respect to the situation in the EU countries according to the identified criteria; 5. to determine the impact of the Lithuanian public debt on social expenditure and to compare it with that in other EU countries. Research methods. Analysis and synthesis of scientific literature and legal documents, statistical data collection and analysis methods, comparative analysis, graphical representation techniques, logical analysis, regression analysis. Research results. Part One introduces the concept of public debt, analyzes the factors influencing government borrowing needs, importance of borrowing to economy and structured models of debt burden. Part Two, having analyzed various scientific articles, provides criteria of the public debt evaluation, reasons importance of the public debt composition and presents the assessment model of the impact of public debt on social expenditure. Part Three gives structural and dynamic analysis of the Lithuanian public debt, evaluates the amount of public debt, according to the mentioned criteria for public debt assessment, and discusses the impact of the Lithuanian public debt on social spending and compares with that in other EU countries. The results of research show that the Lithuanian public debt is one of the smallest amounts borrowed by the EU countries, but it is rapidly increasing (during 2004-2010 tripled). Analysis of the impact of the public debt on social expenditure shows that the effect of public debt of health costs is negligible, while growth of public debt has positive impact on the costs of education and social security. Increasing spending for education is evaluated as acceptable, while a nonproportional increase of government expenditure on social security is not considered an effective investment and can cause serious problems in the future management of public debt.
The study investigates debt impact on economic growth in ten Central and Eastern European countries from 2001 until 2012. In the existing literature, the theoretical and empirical analyses provide contradicting results on the debt influence on economy, while the global financial and sovereign debt crises encourage new investigations in this field. The determination of debt impact on GDP growth is based on the neoclassical Solow growth model and testified with dynamic OLS, FE and differenced and system GMM estimators. The empirical results prove that the level of debt has the most statistically significant impact on physical capital growth and TFP growth. Furthermore, the decomposition of debt indicates that the GDP growth is explained the most accurately by the incorporation of government, corporate and household debts as separate explanatory variables. The corporate debt has the most significant negative effect on the GDP growth, while the impact of public debt is lower but negative as well. The statistically insignificant household debt encourages evaluating the importance of practical significance of this variable. Further research could take this into consideration as well as the inclusion of new instrumental variables in the dynamic GMM models.
The study investigates debt impact on economic growth in ten Central and Eastern European countries from 2001 until 2012. In the existing literature, the theoretical and empirical analyses provide contradicting results on the debt influence on economy, while the global financial and sovereign debt crises encourage new investigations in this field. The determination of debt impact on GDP growth is based on the neoclassical Solow growth model and testified with dynamic OLS, FE and differenced and system GMM estimators. The empirical results prove that the level of debt has the most statistically significant impact on physical capital growth and TFP growth. Furthermore, the decomposition of debt indicates that the GDP growth is explained the most accurately by the incorporation of government, corporate and household debts as separate explanatory variables. The corporate debt has the most significant negative effect on the GDP growth, while the impact of public debt is lower but negative as well. The statistically insignificant household debt encourages evaluating the importance of practical significance of this variable. Further research could take this into consideration as well as the inclusion of new instrumental variables in the dynamic GMM models.
The subject of Master's work in Financial Law is relevant because of the current global economic situation: because of the emerged financial difficulties countries are in need to borrow. However, budget deficit would also increase. The economy of Lithuania, Latvia an Estonia is commonly considered as the Baltic Region economy and the subject of this research is budget deficit and public debt of Baltic States' from 1990 to 2008. The main objective is to ascertain what causes budget deficit's and public debt's uprising, its' changing and the dependance between both of them. To reach the aforesaid objective we analyse facts about budget deficit and public debt in Baltic States. We also find the factors that influence its' uprising, changing and results in medium and long term. We bring forward the hypothesis that the economy of the three Baltic States is reasonably considered as the economy of the whole Baltic Region while analysing it in confirmity with the criterion of budget deficit and public debt. To reach the objectives we analyse the economical theories about budget deficit, public debt and relations between them; legal acts that regulate how to balance a budget, governments' borrowing policy; Baltic States' convergence program, statistics of these three countries; guidelines and conclusions of European Commission and Council. After accomplishing the research the hypothesis that the economy of the three Baltic States is reasonably considered as the economy of the whole Baltic Region while analysing it in confirmity with the criterion of budget deficit and public debt was confirmed. We now make a conclusion that though countries met the similar developments while trying to solve the problems concerned with budget deficit and public debt the consequences were different because Baltic States took different actions to solve those problems. The implementations and its' direct influence to considered matters have been taken into consideration. We also offer recommendations that would be useful trying to reduce budget deficit and public debt. This work consists of the conception of budget deficit, the explanation and interpretation of different theories, the conception of public debt, the linking up of the concerned matters and theories.
The subject of Master's work in Financial Law is relevant because of the current global economic situation: because of the emerged financial difficulties countries are in need to borrow. However, budget deficit would also increase. The economy of Lithuania, Latvia an Estonia is commonly considered as the Baltic Region economy and the subject of this research is budget deficit and public debt of Baltic States' from 1990 to 2008. The main objective is to ascertain what causes budget deficit's and public debt's uprising, its' changing and the dependance between both of them. To reach the aforesaid objective we analyse facts about budget deficit and public debt in Baltic States. We also find the factors that influence its' uprising, changing and results in medium and long term. We bring forward the hypothesis that the economy of the three Baltic States is reasonably considered as the economy of the whole Baltic Region while analysing it in confirmity with the criterion of budget deficit and public debt. To reach the objectives we analyse the economical theories about budget deficit, public debt and relations between them; legal acts that regulate how to balance a budget, governments' borrowing policy; Baltic States' convergence program, statistics of these three countries; guidelines and conclusions of European Commission and Council. After accomplishing the research the hypothesis that the economy of the three Baltic States is reasonably considered as the economy of the whole Baltic Region while analysing it in confirmity with the criterion of budget deficit and public debt was confirmed. We now make a conclusion that though countries met the similar developments while trying to solve the problems concerned with budget deficit and public debt the consequences were different because Baltic States took different actions to solve those problems. The implementations and its' direct influence to considered matters have been taken into consideration. We also offer recommendations that would be useful trying to reduce budget deficit and public debt. This work consists of the conception of budget deficit, the explanation and interpretation of different theories, the conception of public debt, the linking up of the concerned matters and theories.
The main goal of each country's debt management is to ensure public borrowing at the lowest possible cost and acceptable risk. It is the inefficient management and identification of the prevailing risks during government borrowing that could have a significant impact on the increase in government debt in the future. Thus, the main goal of the study is to examine the country risk factors for the level of public debt in the EU countries and to conduct the study on the basis of empirical data. The work consists of three main parts. The first part of the work analyzes the scientific literature describing the concept of public debt, the types of country risks and their interrelationship. The second part formulates the methodology of empirical research. The third part describes the results of an empirical study already performed and formulate conclusions.
The main goal of each country's debt management is to ensure public borrowing at the lowest possible cost and acceptable risk. It is the inefficient management and identification of the prevailing risks during government borrowing that could have a significant impact on the increase in government debt in the future. Thus, the main goal of the study is to examine the country risk factors for the level of public debt in the EU countries and to conduct the study on the basis of empirical data. The work consists of three main parts. The first part of the work analyzes the scientific literature describing the concept of public debt, the types of country risks and their interrelationship. The second part formulates the methodology of empirical research. The third part describes the results of an empirical study already performed and formulate conclusions.
The main goal of each country's debt management is to ensure public borrowing at the lowest possible cost and acceptable risk. It is the inefficient management and identification of the prevailing risks during government borrowing that could have a significant impact on the increase in government debt in the future. Thus, the main goal of the study is to examine the country risk factors for the level of public debt in the EU countries and to conduct the study on the basis of empirical data. The work consists of three main parts. The first part of the work analyzes the scientific literature describing the concept of public debt, the types of country risks and their interrelationship. The second part formulates the methodology of empirical research. The third part describes the results of an empirical study already performed and formulate conclusions.
The main goal of each country's debt management is to ensure public borrowing at the lowest possible cost and acceptable risk. It is the inefficient management and identification of the prevailing risks during government borrowing that could have a significant impact on the increase in government debt in the future. Thus, the main goal of the study is to examine the country risk factors for the level of public debt in the EU countries and to conduct the study on the basis of empirical data. The work consists of three main parts. The first part of the work analyzes the scientific literature describing the concept of public debt, the types of country risks and their interrelationship. The second part formulates the methodology of empirical research. The third part describes the results of an empirical study already performed and formulate conclusions.
This Master's thesis is dedicated to the analysis of investor protection mechanisms in case of state insolvency. The classic notion of state immunity provides that a state is the sovereign that is immune from judicial proceedings. However, Lithuania as well as other states waive the sovereign immunity and participate in financial markets as equal entities. Contractual relationship forms between a state and an investor who has purchased debt securities issued by the state. An investor who invests into the state securities and participates in the financial market shall be entitled to special protection, as he remains the weaker party to the relations in any case. The thesis has analysed interpretation of the notion of sovereign insolvency in international law; however, no such notion has been found. The research has shown that this notion is construed as a state's incapacity to comply with its financial liabilities. Thus, according to the world's practice, if a state has become insolvent, it is incapable of complying with the assumed financial liabilities to its creditors, i.e. high profile foreign and local banks and investors holding bonds or other debt securities of the state. Key factors determining a state's resolution to proclaim own insolvency are excessive indebtedness of the state, slow economic growth. State's insolvency and incapacity to comply with the assumed liabilities as well as debt restructuring have negative effects on financial markets, given that the state's, i.e. issuer's, debt securities have spread all over the world. In such a situation, the state launches a debt restructuring offer to its investors with the intention to amend terms and conditions of the bonds or postpone their repurchase. The Master's thesis provides comprehensive analysis of investor rights in case of a state's intention to restructure the debt. Hence, if a state is incapable of paying the nominal value of bonds to the respective bondholders, it launches an offer to exchange the bonds held to new restructured bonds and compensation of other sorts. Lithuania and other EU member states are subject to a Collective Action Clause (CAC) that establishes state securities restructuring conditions for the cases where a state is incapable of paying the primary nominal value of the securities. The European Parliament has established that all new more than one year maturity securities issued by Governments of the Eurozone, i.e. state-issued bonds, shall be subject to the CAC. These clauses are aimed at creating more favourable conditions for agreement between the state and its private sector creditors, considering that the private sector is involved. However, the concern is whether or not inclusion of such clauses into bond subscription agreements might create an obstacle for the investors to dispute such offer and reject debt restructuring. As a result, state debt restructuring would satisfy state's interests by compromising the investors' interests. Absence of the CAC from bond agreements might pose difficulties for the investors to protect the violated rights and reject debt restructuring on pari passu basis. Many scientists acknowledge that there is currently no universal system that would govern state debt restructuring and protection of investor interests. Witnessing the state bankruptcy and incapacity to pay the debt to the bondholders in Greece as well as the effect of it on other member states of the Eurozone, the European Union has adopted a resolution to establish the European Stability Mechanism (ESM) to tighten budget discipline and enforce coordination of economic and financial policies of the member states. The thesis also discusses the implications of legislative acts and institutions for investors protecting their violated rights. Analysis of investor protection mechanisms is unreasonable unless the possibility for investors to seek protection of the violated rights is discussed. Hence, the Master's thesis has also involved review of two options for the investors to protect the violated rights. The first option is to address the International Centre for Settlement of Investment Disputes, where investors initiate judicial disputes on the basis of the Bilateral International Agreement, or to apply to foreign national courts according to the governing law specified in the respective bond subscription agreement. Investors address the International Centre for Settlement of Investment Disputes primarily due to failure of national courts in a number of countries to directly ensure enforcement of investment agreements. This investor protection mechanism has proven its value as the specialized place for resolution of investment disputes, and is the most favourable rights protection mechanism that can be used by investors at present. There is little chance for the investors' claim to be satisfied if submitted to the respective country's courts. However, if the issued bond subscription agreement specifies the governing law of a country other than the issuing country's law (e.g. English law), investors have more chances when submitting the claim to the other country's courts.
The state finances is the system of the economical fiscal relationships that emerge when the state accumulates, allocates and uses the financial means it needs. The financial system of the developed states covers the governments and local authorities' budgets, the finances of public enterprises and the state specialized funds. The state financial system provides the means (mainly from taxes, state credits, securities emissions, etc) for covering the growing expenses in the military, social, cultural spheres, in management and railway building, etc and for, obviously, covering the national debt. As expenses exceed income, the state is usually forced to cover this difference by borrowed means. Due to the borrowing of this kind, the loans and other financial duties carried in the name of the state create the ground for the national debt.
The state finances is the system of the economical fiscal relationships that emerge when the state accumulates, allocates and uses the financial means it needs. The financial system of the developed states covers the governments and local authorities' budgets, the finances of public enterprises and the state specialized funds. The state financial system provides the means (mainly from taxes, state credits, securities emissions, etc) for covering the growing expenses in the military, social, cultural spheres, in management and railway building, etc and for, obviously, covering the national debt. As expenses exceed income, the state is usually forced to cover this difference by borrowed means. Due to the borrowing of this kind, the loans and other financial duties carried in the name of the state create the ground for the national debt.
The state finances is the system of the economical fiscal relationships that emerge when the state accumulates, allocates and uses the financial means it needs. The financial system of the developed states covers the governments and local authorities' budgets, the finances of public enterprises and the state specialized funds. The state financial system provides the means (mainly from taxes, state credits, securities emissions, etc) for covering the growing expenses in the military, social, cultural spheres, in management and railway building, etc and for, obviously, covering the national debt. As expenses exceed income, the state is usually forced to cover this difference by borrowed means. Due to the borrowing of this kind, the loans and other financial duties carried in the name of the state create the ground for the national debt.
The state finances is the system of the economical fiscal relationships that emerge when the state accumulates, allocates and uses the financial means it needs. The financial system of the developed states covers the governments and local authorities' budgets, the finances of public enterprises and the state specialized funds. The state financial system provides the means (mainly from taxes, state credits, securities emissions, etc) for covering the growing expenses in the military, social, cultural spheres, in management and railway building, etc and for, obviously, covering the national debt. As expenses exceed income, the state is usually forced to cover this difference by borrowed means. Due to the borrowing of this kind, the loans and other financial duties carried in the name of the state create the ground for the national debt.
