Trends in Dynamics of Public Debt in EU

The impressive growth of public debt during last decades and the problem of its sustainability entered in the preoccupation sphere of all governments in EU. The accumulation of public debt is a consequence of how the economic growth is conducted but in the same time it is affecting in long term the growth process itself. Based on the recent studies and using databases published by international organisations we try to estimate the parameters of the convergence/divergence process in matter of public debt at the level of the whole EU and at the level of some groups of countries. First, we are considering two major groups of countries (EU14 - old members of EU, after Brexit, and respectively EU11 - new eastern members adhered to EU after 2000). Moreover, certain behavioural regimes in matter of public debt dynamics are estimated, in which countries in EU are then grouped. Finally, we shall present a unifying model by putting all regimes together. This model could be useful to simulate the long term dynamics of public debt in EU countries and to evaluate the impact of certain policy measures.