The sustainability of public finances in republic of Moldova under EU fiscal rules Cover Image

The sustainability of public finances in republic of Moldova under EU fiscal rules
The sustainability of public finances in republic of Moldova under EU fiscal rules

Author(s): Sebastian Lazăr, Tatiana Covalschi
Subject(s): Transformation Period (1990 - 2010), EU-Accession / EU-DEvelopment, Public Finances, Fiscal Politics / Budgeting
Published by: Editura Universităţii »Alexandru Ioan Cuza« din Iaşi
Keywords: public finance; sustainability; public debt; budget deficit; output gap; structural deficit;

Summary/Abstract: This paper analyses public finances sustainability in the Republic of Moldova under the European Union fiscal rules, by estimating the structural budget balance indicator using a three steps methodology. We concluded that, except for 2009, the Republic of Moldova complies with the Maastricht numerical fiscal rule; however it does not comply with the new fiscal rules regarding the structural deficit and public expenditures growth that had been set by the Fiscal Compact. The fact that budget deficits and public debt had been sustainable was mainly because of the concessions made by the external creditors in restructuring the public debt and was not a merit of national government. Moreover, since the regular budget deficit and the structural one tell different stories, we strongly advocate for using the latter in order to complement the existing data with a medium-term budgetary view.

  • Issue Year: 63/2016
  • Issue No: 2
  • Page Range: 149-159
  • Page Count: 11
  • Language: English