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Fiscal Challenges Facing the New Member States

Author

Listed:
  • Marek Dabrowski

    (CASE, Center for Social and Economic Research, 12 Sienkiewicza St, Warsaw, Poland.)

  • Malgorzata Antczak

    (CASE, Center for Social and Economic Research, 12 Sienkiewicza St, Warsaw, Poland.)

  • Michal Gorzelak

    (CASE, Center for Social and Economic Research, 12 Sienkiewicza St, Warsaw, Poland.)

Abstract

This paper provides an analysis of the fiscal challenges faced by the eight transition economies, which joined the European Union (EU) in May 2004. More than half of them run excessive fiscal deficits being partly a legacy of an early transition period, partly – a consequence of additional accession-related costs. In addition, the long-term fiscal outlook, connected with the consequences of population ageing, is dramatic. On the other hand, the perspective of Economic and Monetary Union entry should provide the new member states with a strong incentive to reduce their deficits now because waiting (and postponing both fiscal adjustment and the adoption of the euro) will only result in higher cumulative fiscal costs. Comparative Economic Studies (2006) 48, 252–276. doi:10.1057/palgrave.ces.8100159

Suggested Citation

  • Marek Dabrowski & Malgorzata Antczak & Michal Gorzelak, 2006. "Fiscal Challenges Facing the New Member States," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(2), pages 252-276, June.
    • Handle: RePEc:pal:compes:v:48:y:2006:i:2:p:252-276
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    References listed on IDEAS

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    1. Piotr Bujak & Joanna Siwinska-Gorzelak, 2003. "Short-run Macroeconomic Effects of Discretionary Fiscal Policy Changes," CASE Network Studies and Analyses 0261, CASE-Center for Social and Economic Research.
    2. Marek Dabrowski, 2006. "A Strategy for EMU Enlargement," Springer Books, in: Marek Dabrowski & Jacek Rostowski (ed.), The Eastern Enlargement of the Eurozone, chapter 0, pages 199-225, Springer.
    3. Elżbieta Kawecka-Wyrzykowska, 2002. "Merits and shortcomings of the Commission's financial framework for Eastward enlargement," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 37(2), pages 80-83, March.
    4. Coricelli, Fabrizio & Ercolani, Valerio, 2002. "Cyclical and Structural Deficits on the Road to Accession: Fiscal Rules for an Enlarged European Union," CEPR Discussion Papers 3672, C.E.P.R. Discussion Papers.
    5. Jacek Rostowski, 2004. "The Stability and Growth Pact - Essential and Unfeasible," CASE Network Studies and Analyses 0275, CASE-Center for Social and Economic Research.
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    Cited by:

    1. Marek Dabrowski, 2006. "A Strategy for EMU Enlargement," Springer Books, in: Marek Dabrowski & Jacek Rostowski (ed.), The Eastern Enlargement of the Eurozone, chapter 0, pages 199-225, Springer.
    2. Mariusz Jarmuzek, 2005. "Are the EU new member states fiscally sustainable? An empirical analysis," UCL SSEES Economics and Business working paper series 51, UCL School of Slavonic and East European Studies (SSEES).
    3. Ferré, Montserrat, 2012. "The effects of uncertainty about countries’ compliance with the Stability and Growth Pact," Journal of Policy Modeling, Elsevier, vol. 34(5), pages 660-674.
    4. Marek Dabrowski, 2007. "EMU enlargement: A progress report," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(1), pages 39-44, April.
    5. Dabrowski, Marek, 2010. "The global financial crisis: Lessons for European integration," Economic Systems, Elsevier, vol. 34(1), pages 38-54, March.

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