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In the article the following 2 theses are examined fact-based: 1. "Many countries have a so high public debt that a return to a higher leading interest of the European Central Bank (ECB) is not possible any more." 2. "If it comes to a clear interest increase, heavy real-economic frictions or even the insolvency of various countries can be prevented only by a partial debt relief." In the analysis are shown the magnitude of the low interest rate policy and the quantitative Easing (QE) of the European Central Bank (ECB) on the one hand, and on the other hand the public debt as well as the interest to be paid on that debt resulting from higher interest rates are examined for selected member countries of the EEMU (France, Germany, Italy Spain). As a consequence it appears that with a lasting reincrease of the level of interest rates (by increasing the leading interest rate of the ECB) and/or an end of the loan purchase programme within the scope of the QE for many states of the EWWU the ability in the debt service will not be possible any more. High budget deficits would lead to heavy economic frictions. Summarizing for the economic and political stability of many states: An exit from low interest rate policy and QE will be only possible – if there is an ongoing lack of alternatively sustained reforms in economic and financial policy –if it comes to a sustained debt relief in the EEMU.

PurposeThis paper aims to investigate the effects of contractionary fiscal policy shocks on major Greek macroeconomic variables within a structural vector autoregression framework while accounting for debt dynamics.Design/methodology/approachThe sign restriction approach is applied to identify a linear combination of government spending and government revenue shock simultaneously while accounting for debt dynamics. Additionally, output and unemployment responses to fiscal shocks under different scenarios concerning the amalgamation of austerity measures are considered.FindingsThe results indicate that a contractionary consumption policy shock, namely, a 1 per cent decrease in government consumption and a 1 per cent increase in indirect taxes, is preferred, as it produces a minor decrease in output and substantially decreases public debt, while a contractionary wage policy shock is suitable only when the government aims to sharply reduce public debt, as the consequences for the economy are harsh. A contractionary investment policy shock is not recommended, as it triggers a rise in unemployment and a fall in output, while the effect on the public debt is minor.Practical implicationsPolicymakers should focus their efforts on reducing unproductive government consumption on the expenditure side. Concerning revenues, the reinforcement of tax administration is recommended to ensure that indirect taxes will be collected.Originality/valueThis paper contributes to the existing literature by providing a disaggregated analysis of the effects of fiscal policy actions in Greece by implementing several fiscal policy scenarios and accounting for the level of public debt. All scenarios are in the vein of the economic adjustment programs guidelines.

Throughout the decade of the 1990s, major emphasis in Pakistan
remained on fiscal reform as a part of the reform programmes undertaken
by the various governments of Pakistan. Fiscal reform assumes
significance considering the high budget deficits that Pakistan has been
experiencing. These have added to Pakistan's total debt burden in
general and external debt in particular. Increase in the burden of debt
adds to debt-servicing expenditure which further feeds back into the
issue of high fiscal deficit. Debt-servicing increased to almost 47
percent1 by the middle of the decade of 1990s and comprised 8.3 percent
of the GDP, up from less than 1 percent mid-1960s. Pakistan's external
debt at over $32 billion2 in 1998 was 41 percent of its GNP which was
amongst the highest in the South Asian region with India's at 20 percent
of GNP in the same year and Sri Lanka's also at 41 percent3 of its GNP.
In this paper, we attempt to explore the rationale behind the emphases
on the improvement in both the deficit-to-GDP and the tax-to-GDP ratios
that have remained the cornerstones of Pakistan's fiscal reform effort
in the decade of the 1990s. Section 2 is a discussion of the extent of
successes and failures of the fiscal reform effort thus far and explores
the relationship between tax generation and budget deficit. Section 3
discusses the impact of expenditures on budget deficit. Section 4 shows
the rise in dependence on external sources of financing. Section 5 gives
the conclusions.

Using a data set covering about 277,000 firms across 79 countries over the period 2004-11, this paper examines the evolution of firms capital structure during the global financial crisis and its aftermath in 2010-11. The study finds that firm leverage and debt maturity declined in advanced economies and developing countries, even in countries that did not experience a crisis. The deleveraging and maturity reduction were particularly significant for privately held firms, including small and medium enterprises. For small and medium-size enterprises, these effects were larger in countries with less efficient legal systems, weaker information-sharing mechanisms, shallower banking systems, and more restrictions on bank entry. In contrast, there is weaker evidence of a significant decline of leverage and debt maturity among firms listed on a stock exchange, which are typically much larger than other firms and likely benefit from the spare tire of easier access to capital market financing.

We build upon a Markov-Switching Bayesian Vector Autoregression (MSBVAR) model to study how the credit default swaps market in the euro area becomes an important chain in the propagation of shocks through the entire financial system. The study sheds light on the regime-dependent interconnectedness between the risk of investing in banking and public sector bonds and provides novel evidence that a rise in sovereign debt, due to the countercyclical fiscal policy measures, is perceived by stock market investors as a burden on growth prospects. We also document that government interventions in the banking sector deteriorate the credit risk of sovereign debt. Higher risk premium required by investors for holding riskier government bonds depresses the sovereign debt market, it impairs banks' balance sheets, and it depresses the collateral value of loans leading to bank retrenchment. The ensuing two-way banking-fiscal feedback loop indicates that government interventions do not necessarily stabilize the banking sector.

The story of America is a story of dreamers and defaulters. It is also a story of dramatic financial panics that defined the nation, created its political parties, and forced tens of thousands to escape their creditors to new towns in Texas, Florida, and California. As far back as 1792, these panics boiled down to one simple question: Would Americans pay their debts-or were we just a nation of deadbeats? From the merchant William Duer's attempts to speculate on post-Revolutionary War debt, to an ill-conceived 1815 plan to sell English coats to Americans on credit, to the debt-fueled railroad expansion that precipitated the Panic of 1857, Scott Reynolds Nelson offers a crash course in America's worst financial disasters-and a concise explanation of the first principles that caused them all. Nelson shows how consumer debt, both at the highest levels of finance and in the everyday lives of citizens, has time and again left us unable to make good. The problem always starts with the chain of banks, brokers, moneylenders, and insurance companies that separate borrowers and lenders. At a certain point lenders cannot tell good loans from bad-and when chits are called in, lenders frantically try to unload the debts, hide from their own creditors, go into bankruptcy, and lobby state and federal institutions for relief. With a historian's keen observations and a storyteller's nose for character and incident, Nelson captures the entire sweep of America's financial history in all its utter irrationality: national banks funded by smugglers; fistfights in Congress over the gold standard; and presidential campaigns forged in stinging controversies on the subject of private debt. A Nation of Deadbeats is a fresh, irreverent look at Americans' addiction to debt and how it has made us what we are today..

Предметом исследования научной статьи выступают экономические отношения, возникающие в процессе государственных заимствований и долговых отношений в национальной экономической системе. Целью научной статьи является анализ рынка государственного долга России в части повышения его конкурентоспособности в современных условиях. Наиболее целесообразным методом финансирования государства является выпуск государственных займов. В условиях финансового кризиса обостряются проблемы бюджетных дефицитов, вследствие чего отмечается лавинообразный рост государственного долга. В данной статье рассматриваются современные проблемы рынка государственного долга РФ. Проводится анализ рынка государственного долга и проблемы повышения его конкурентоспособности. В настоящее время рынок государственных ценных бумаг является основной частью российского финансового рынка, рост которого превышает рост других сегментов финансового рынка России. Несмотря на низкие показатели государственного долга РФ относительно ВВП, наблюдаются высокие темпы его прироста, рост стоимости заимствований и снижение чистого привлечения. В заключении автором обозначены некоторые аспекты повышения конкурентоспособности рынка государственного долга РФ. ; The subject of the study of scientific articles are the economic relations arising in the course of government borrowing and debt in the national economic system. The purpose of a scientific article is to analyze the public debt market in Russia, in terms of increasing its competitiveness in the current conditions. The most appropriate method of financing the state is the issue of state loans. The financial crisis has exacerbated the problem of budget deficit, as a result there was an increase in public debt. This article discusses the current problems of the state market debt of the Russian Federation. To date, the market for government debt is the main segment of the domestic financial market, whose growth exceeded the growth of other segments of the financial market in Russia. Despite the low levels of public debt to GDP of the Russian Federation, there is fhigh growth rates, the rising cost of borrowing and the reduction in net attraction. In conclusion, the author highlights some aspects of improving the competitiveness of the market of public debt of the Russian Federation.

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.

Cover -- CONTENTS -- CONTEXT -- RECENT DEVELOPMENTS, OUTLOOK AND RISKS -- KEY POLICY ISSUES -- A. Ensuring Fiscal Sustainability -- B. Making Potential Growth More Resilient and Sustainable -- C. Preserving Financial Stability and Facilitating Credit Extension -- D. External Sector Assessment -- E. Other Issues -- STAFF APPRAISAL -- FIGURES -- 1. Real Sector Developments -- 2. Tourism Sector Developments -- 3. External Sector Developments -- 4. Fiscal Sector Developments -- TABLES -- 1. Selected Economic Indicators -- 2. Medium-term Projections, 2015/16-2023/24 -- 3. Balance of Payments, 2012/13-2019/20 -- 4. National Government Operations, 2012/13-2019/2020 -- 5. Assets and Liabilities of Deposit Money Banks, 2010/2011-2016/17 -- 6. Banks' Financial Soundness Indicators, 2014-2018 -- APPENDICES -- I. Enhancing Resilience to Climate Change -- II. Staff Policy Advice, 2016 Article IV Consultation -- III. External Sector Assessment -- IV. Risk Assessment Matrix (RAM) -- V. Medium Term to Long Term Fiscal Sustainability -- VI. Tax Reform -- VII. Debt Sustainability Analysis -- VIII. Tourism and Diversification -- IX. Financial Sector Reforms -- X. Labor Market and Minimum Wages -- CONTENTS -- FUND RELATIONS -- RELATIONS WITH OTHER INTERNATIONAL FINANCIAL INSITUTIONS -- STATISTICAL ISSUES

The issue of public sector management, especially management of public finance, identifies as extremely important in both theoretical and practical areas. Within the context of social and economic change, its meaning becomes crucial to the smooth and efficient functioning of public institutions including local government units. The search for optimal solutions in the sphere of local governments' financial management and the implementation of new tools causes an increase in the efficiency of financial management at local and central levels, an increase in the rational use of public resources' management, a transparency of expenditures, and above all, an improvement in the efficiency of public tasks that the state and local governments carry out for their citizens. The aim of this paper is to present three tools that have been introduced in recent years with the aim to increase the efficiency of public financial management. They are the performance budget, the individual debt index, and the long-term financial forecast of the LGU. Also, selected survey results are presented that show the opinion of local authorities on the implementation and usefulness of the tools mentioned. JEL Code: H72. DOI: https://doi.org/10.15544/ssaf.2016.17

This study analyses the composition and main determinants of spending dynamics in selected euro area countries between 1999 and 2013. To assess the stance of public spending policies we use the indicators developed in Hauptmeier et al. (2011). Our results indicate that the overall expansionary expenditure stance in 1999-2009 was mainly driven by public consumption. Transfers and subsidies on the other hand were mostly expansionary after 2008 while public investment had boomed just before the crisis and turned restrictive during the crisis. The overall policy stance turned restrictive in 2010 and strongly so in Greece, Ireland, Portugal and Spain. Most consolidation efforts focussed on public investment and on public consumption and while transfers and subsidies were largely spared. Our econometric analysis, which covers the 2000-2013 period, shows a significantly pro-cyclical stance of public consumption which was driving overall spending dynamics. The degree of spending expansion tends to be negatively affected by the size of government debt and the presence of effective fiscal rules. On the other hand, EMU-related interest savings coincided with an expansionary expenditure stance. Revenue windfalls and shortfalls exerted a significant effect on government investment spending.

When governments are in a parliamentary minority they have to negotiate with opposition parties over the annual budget. We argue that, as a consequence, the preferences of the opposition concerning fiscal outcomes should be reflected in the yearly budget balances. We present a theoretical argument in which the opposition faces a trade-off. It has a short-term interest in deficits since they can signal a weak government, but a long-term aversion to them because, if they reach office, they will have to deal with the burden of increased debt. Empirically, we find that opposition parties affect deficit outcomes depending on their probability of governing in the next term and the weakness of the incumbent government. When the opposition is mainly concentrated in one party, it is likely that it will take over the government and this will make the opposition deficit-averse in the current period. However, if the minority government is a coalition, then a concentrated opposition might see deficits as an opportunity to reach office earlier and might be willing to pass budgets with deficit. [Copyright Elsevier B.V.]

Darstellung der brasilianischen Verschuldungskrise und Beurteilung des Stabilisierungsprogramms 1983-84 vor dem Hintergrund der wirtschaftlichen Leistungsfähigkeit und der Zuwachsraten der industriellen Produktion