The Impact of the European Financial Stability  Facility (Efsf) in the Euro Area: Contemporary  Problems, Difficulties and Perspectives

Oncioiu Ionica

Volume : III, Issue : X, October - 2013

The Impact of the European Financial Stability Facility (Efsf) in the Euro Area: Contemporary Problems, Difficulties and Perspectives

Oncioiu Ionica

Abstract :

The recent financial and economic crisis debt sustainability and the resulting increase in fiscal deficit has generated renewed interest in domestic as well as external debt sustainability issue of the highly indebted developed and developing countries. This paper examines the potential impact of the European Financial Stability Facility (EFSF) on government debt (and deficit) in euro area countries using the present value of budget constraint approach. In this context, the following question appeared: How did the government solve short–, medium– and long–term fiscal challenges posed by aging societies? What strategies must we adopt to provide that someone will pay to the budget? Empirical results indicate that the series of government expenditure, revenue and discounted debt are non–stationary and assessment of budgetary positions because it is crucial that the European economic governance.