Publication detail

What Are Their Words Worth, Political Plans and Economic Pains of Fiscal Consolidations in New EU Member States

Author(s): doc. Ing. Ondřej Schneider MPhil., Ph.D.,
PhDr. Jan Zápal Ph.D.,
Type: Articles in journals with impact factor
Year: 2006
Number: 5
ISSN / ISBN: ISSN 0012–8775
Published in: Eastern European Economics
Publishing place:
Keywords:
JEL codes:
Suggested Citation: Zapal, J. and Schneider, O., 'What Are Their Words Worth, Political Plans and Economic Pains of Fiscal Consolidations in New EU Member States, Eastern European Economics, 44(5), 6-37
Abstract: This paper tracks the behavior of the fiscal authorities of the ten new EU
member states in the period that immediately preceded their EU accession in 2004. We
analyze the reasons that led to fiscal consolidations in the new members and present evidence
from the preaccession economic and convergence programs of the ten inductees concerning
the planed steps of the fiscal authorities and contrast them the subsequent experience.
Throughout the paper, we identify two groups of countries that significantly differ in fiscal
behavior. Our key finding concerning the behavior of the group of fiscally irresponsible
countries—four central European countries and two Mediterranean states—is that their
current problems with high budget deficits originate in their lax approach and unwillingness
to implement politically costly expenditure cuts, which is apparent in their repeated
budget revisions and deferral of deficit reduction.

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