EU fiscal governance and budget consolidation in Visegrád countries

Budget consolidations in Visegrád countries, which followed European financial and debt crisis, were mainly driven by external factors such as EU fiscal governance. Since the Visegrád countries have accomplished their consolidation effort, it seems topical to study their experience and assess the ef...

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Autores principales:	Zh. N. Komissarova, E. A. Sergeev
Formato:	article
Lenguaje:	EN RU
Publicado:	MGIMO University Press 2019
Materias:	budget deficit fiscal policy fiscal governance budget consolidation growth and stability pact visegrád countries International relations JZ2-6530
Acceso en línea:	https://doaj.org/article/3a6450156dd14b509179590e52782b5d
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spelling	oai:doaj.org-article:3a6450156dd14b509179590e52782b5d2021-11-23T14:50:41ZEU fiscal governance and budget consolidation in Visegrád countries2071-81602541-909910.24833/2071-8160-2019-3-66-131-158https://doaj.org/article/3a6450156dd14b509179590e52782b5d2019-07-01T00:00:00Zhttps://www.vestnik.mgimo.ru/jour/article/view/966https://doaj.org/toc/2071-8160https://doaj.org/toc/2541-9099Budget consolidations in Visegrád countries, which followed European financial and debt crisis, were mainly driven by external factors such as EU fiscal governance. Since the Visegrád countries have accomplished their consolidation effort, it seems topical to study their experience and assess the efficiency of consolidation measures. Involving descriptive statistical analysis, the authors posit that supranational impact on national budgets of Visegrád countries was quite efficient, as all economies concerned have accomplished a relatively sizeable fiscal consolidation. This happened largely due to the fact that the governments did not intend to lose vast amounts of funds from the EU budget. Such an option was quite feasible as a part of possible sanctions related to excessive deficit. The Czech Republic, Hungary, Poland and the Slovak Republic run different consolidations as to scale, structure and measures taken, though one could highlight some similarities. On the one hand, consolidations were to a great extent carried out through the means of indirect taxation, because they have a less distortive nature, given the structural characteristics of countries at issue. On the other hand, the governments refrained from raising direct taxes due to their distortive character. Hungary was the only country, which took some active measures in the field of corporate taxation, and subsequently suffered from drop in tax collection. The Visegrád countries did cut government expenditures, but strived to use the most effective instruments such as curbing employment in public sector. Further, there were some subsidiary factors at place that influenced consolidation pace. For example, three of four Visegrád countries are not members of a currency union, which inter alia contributed to monetizing government debt. At the same time, some measures taken by the countries, were of a quite formal nature. For instance, Hungary totally nationalized pension system in order to increase budget revenues. Nevertheless, all Visegrád countries reached deficit target without any revolutionary changes to main fiscal aggregates, which means that consolidations were at least nominally effective. However, cumulative deficit change was not fully accompanied by lowering debt and was by several times less than cumulative transfers from the EU budget. At the same time the budget consolidations in Visegrád countries could be called efficient as GDP growth rates restored, as did investors’ confidence and exports.Zh. N. KomissarovaE. A. SergeevMGIMO University Pressarticlebudget deficitfiscal policyfiscal governancebudget consolidationgrowth and stability pactvisegrád countriesInternational relationsJZ2-6530ENRUVestnik MGIMO-Universiteta, Vol 0, Iss 3(66), Pp 131-158 (2019)
institution	DOAJ
collection	DOAJ
language	EN RU
topic	budget deficit fiscal policy fiscal governance budget consolidation growth and stability pact visegrád countries International relations JZ2-6530
spellingShingle	budget deficit fiscal policy fiscal governance budget consolidation growth and stability pact visegrád countries International relations JZ2-6530 Zh. N. Komissarova E. A. Sergeev EU fiscal governance and budget consolidation in Visegrád countries
description	Budget consolidations in Visegrád countries, which followed European financial and debt crisis, were mainly driven by external factors such as EU fiscal governance. Since the Visegrád countries have accomplished their consolidation effort, it seems topical to study their experience and assess the efficiency of consolidation measures. Involving descriptive statistical analysis, the authors posit that supranational impact on national budgets of Visegrád countries was quite efficient, as all economies concerned have accomplished a relatively sizeable fiscal consolidation. This happened largely due to the fact that the governments did not intend to lose vast amounts of funds from the EU budget. Such an option was quite feasible as a part of possible sanctions related to excessive deficit. The Czech Republic, Hungary, Poland and the Slovak Republic run different consolidations as to scale, structure and measures taken, though one could highlight some similarities. On the one hand, consolidations were to a great extent carried out through the means of indirect taxation, because they have a less distortive nature, given the structural characteristics of countries at issue. On the other hand, the governments refrained from raising direct taxes due to their distortive character. Hungary was the only country, which took some active measures in the field of corporate taxation, and subsequently suffered from drop in tax collection. The Visegrád countries did cut government expenditures, but strived to use the most effective instruments such as curbing employment in public sector. Further, there were some subsidiary factors at place that influenced consolidation pace. For example, three of four Visegrád countries are not members of a currency union, which inter alia contributed to monetizing government debt. At the same time, some measures taken by the countries, were of a quite formal nature. For instance, Hungary totally nationalized pension system in order to increase budget revenues. Nevertheless, all Visegrád countries reached deficit target without any revolutionary changes to main fiscal aggregates, which means that consolidations were at least nominally effective. However, cumulative deficit change was not fully accompanied by lowering debt and was by several times less than cumulative transfers from the EU budget. At the same time the budget consolidations in Visegrád countries could be called efficient as GDP growth rates restored, as did investors’ confidence and exports.
format	article
author	Zh. N. Komissarova E. A. Sergeev
author_facet	Zh. N. Komissarova E. A. Sergeev
author_sort	Zh. N. Komissarova
title	EU fiscal governance and budget consolidation in Visegrád countries
title_short	EU fiscal governance and budget consolidation in Visegrád countries
title_full	EU fiscal governance and budget consolidation in Visegrád countries
title_fullStr	EU fiscal governance and budget consolidation in Visegrád countries
title_full_unstemmed	EU fiscal governance and budget consolidation in Visegrád countries
title_sort	eu fiscal governance and budget consolidation in visegrád countries
publisher	MGIMO University Press
publishDate	2019
url	https://doaj.org/article/3a6450156dd14b509179590e52782b5d
work_keys_str_mv	AT zhnkomissarova eufiscalgovernanceandbudgetconsolidationinvisegradcountries AT easergeev eufiscalgovernanceandbudgetconsolidationinvisegradcountries
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EU fiscal governance and budget consolidation in Visegrád countries

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