Public investment and growth in New EU member states: an overview

Jan Hanousek and Evžen Kočenda

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: This paper presents major economic developments and recent trends in macroeconomic policy design of the New Member States of the European Union (EU). Overall macroeconomic situation, fiscal reforms, and public finance developments are discussed for each member state with accent on the developments in growing public investments. Sectors that benefited most are transport systems, general government services, housing, and education. Earlier favorable developments in the new EU members have been hampered by the recent crisis as external demand for exports fell and capital inflows into region were reduced, coupled with a lower domestic demand. The crisis has affected all new EU members with varying impact due to different magnitudes of earlier macroeconomic imbalances as well as differences in degree of economic integration with the rest of the EU. Future convergence and economic development of the new EU members will mainly depend on maintaining financial stability to regain the credibility of the foreign investors, rational fiscal policies with the support of the growth enhancing public investments and social network, and economic situation in the region’s major economic partners.

Keywords: Public finance; public investment; economic growth; EU convergence and integration; macroeconomic policy; fiscal reforms; new EU members (search for similar items in EconPapers)
JEL-codes: E61 E62 F42 H50 H60 O11 (search for similar items in EconPapers)
Date: 2009-10-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2009-23

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