Original scientific paper
https://doi.org/10.1080/1331677X.2021.1941178
Growing fiscal risk in European Union resulting from government contingent liabilities in the pandemic crisis – assessment and policy recommendations
Dan Gabriel Anghel
Iustina Alina Boitan
orcid.org/0000-0001-6510-5063
Kamilla Marchewka-Bartkowiak
Abstract
The pandemic crisis, responsible for increased levels of financing
with public debt and contingent liabilities, may trigger another
debt crisis across the European Union. Our research indicates that
member states are increasingly willing to use public guarantees
and other off-budget instruments, which are classified as "hidden
debt" or "hidden expenditure". Simulations have shown that if
public guarantees have to be covered by the budget, an unprecedented increase in a public debt may occur across the euro area
countries and the entire EU as a whole. Therefore, the authors
recommend the introduction of uniform rules for estimating fiscal
risk due to contingent liabilities, as well as standards for their
reporting, allowing for their constant monitoring at the EU level.
Keywords
Contingent liabilities; fiscal risk; government guarantees; pandemic crisis
Hrčak ID:
302272
URI
Publication date:
31.3.2023.
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