«Russia and the World Community’s Respond to a Challenge of Instability of Economic and Legal Systems Materials of the International Scientific-practical Conference ...»
EKONOM: n.20, 15.-21.5.2003 - False promise of stability: Joseph Stiglitz about negative impact of inflexible fiscal policy According to document “statistical Annex of European Economy 2007” achieved mentioned countries in 2005 followed real growth of GDP: Germany: 0,9%, France: 1,2% and Italy: 0,1% Decision of General Council of ECB of 9.august 2006 upon which was rate for standard REPO tender increased from 2,75% to 3% esses in EU and threat of negative asymmetric shocks. 173 Another negative aspect which deteriorate situation in these countries are insufficient reforms of social system in form of too generous system of health care and health insurance as well as pension reforms. Already decade ministers of these government promise initiation of structural reforms what would certainly cause an increase of deficit, though with perspective of its reduction in future. Increase of rate in a certain measure reduce inflation pressure in eurozone, thought it doesn’t solve real problems of these economies – absence of investments and in that time insufficient growth.
Stability and growth pact vs. new member states Stability and growth pact has clearly completely other dimension and role in new member states of European Union such as Slovakia. These countries are in the middle or in the second part of transformation process of national economy. Research of economic cycles does not have long tradition in transitive economies, what partially explain, why conclusions of different analyses aren’t enough convincing until now. However, it is not only about shortness of surveyed period. Very serious fact is that economic cycle in new member states is still affected by some specific factors related to unfinished transformation. These countries went through fundamental changes of all-society, economic and political environment during last fifteen years. Countries as Slovenia, Lithuania, Latvia, Estonia, or Slovakia are very small though very open economies. Together they are joined by same latter fate of formation of independent state. It’s definitely one of the reasons why these countries have relatively good indicators of net foreign debt. Even though no government is awareness enough, when we check the result of Baltic countries or for example Slovenia 175 – results are fair surprising. Low budget deficit, stable monetary environment, low interest rates, acceptable unemployment rate, and rising growth performance. The most interesting are not mentioned positive indicators but something else. In our opinion these countries are the most interesting not for achieved results but permanent dissatisfaction with present state – even though with good development in compare with old member state of EU – and at the same time their stubborn ambitions. It is shown in the first place in objectives to reduce government expenditure and restrain public consumption and reduce government deficit. Especially in Baltic countries and in Slovenia sounds opinion about toughening and decreasing of three percent limit on lower level more often.