The condition of czech public finance and CR´s access to the Eurozone
|Author:||Mgr. Lucie Mrázová|
|Year:||2005 - winter|
|Leaders:|| doc. Ing. Ondřej Schneider MPhil., Ph.D.
|Work type:|| EEI & EP
|Awards and prizes:|
|Abstract:||The aim of this paper is an evaluation of Czech public finance in the period before the Czech republic joins the Eurozone. The first part deals with public finance in EMU. It focuses on the necessary conditions for access to the Eurozone, evaluates six years Euro existence and describes the role of fiscal policy in the Eurozone. The final part characterizes the state of preparation of the Czech economy towards EMU access and the current condition of public finances. The introduction to the model part of the paper is given through a summary of the Convergence program. The model consists of the following calculations: size and development of automatic stabilizers; development of total incomes elasticity from 2003 to 2010. The last calculation compares two versions of particular items, that are highly sensitive to GDP changes in 2010 – passive version and active version including public finance reform. The conclusion of the paper is, that reform steps will lead to fiscal consolidation and enable the CR to access the Eurozone. In case that no complex reforms of pension and healthcare systems will take place, the condition of the public finance seems to be unsustainable in the long run.