The Deteriorating Dynamics of Public Debts Across Countries within the European Monetary Unification in Comparison with Countries Outside the European Monetary

Abstract

The main aim of this study is to analyze the evolution of public debts and general government deficits/surplus across European countries within and outside the monetary unification. In particular, this study compares the dynamics of public debts and 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 is significantly different between European countries. Nations within the European monetary unification seem to have, from 2001 onwards, a deteriorated sovereign debts and general government deficits in comparison to countries outside the European monetary unification. This dissimilar evolution of public debts and general government deficits between European countries can be due to manifold factors. Moreover, these asymmetric paths of public debts and general 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.