Economics, Econometrics and Finance
4 years ago

EU budget deficits found sustainable, ensuring financial stability for member countries.

RePEc: Research Papers in Economics
Are EU budget deficits sustainable
Mark J. Holmes, Jesús Otero, Theodore Panagiotidis

Paper Summary

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The study looked at EU countries' budget deficits from 1971 to 2006 to see if they were sustainable. They used a method to test if the deficits were stable over time and if they depended on each other. Surprisingly, the results showed that the EU countries had sustainable budget deficits throughout the whole period, even before and after the Maastricht treaty.