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Macro-fiscal policy challenges and public investment in new EU member states

Gerd Schwartz (), Ana Corbacho, Qiang Cui, Giovanni Ganelli () and Paolo Manasse
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Gerd Schwartz: International Monetary Fund
Qiang Cui: International Monetary Fund

No 5/2008, EIB Papers from European Investment Bank, Economics Department

Abstract: Most new EU member states (NMS) need further fiscal adjustment to support economic growth and macroeconomic stability. In this context, achieving income convergence with other EU members rests more with maintaining productivity growth, attracting foreign savings, and improving investment efficiency than with increasing government spending (including for infrastructure). Additional institutional fiscal reforms, aimed at improving expenditure efficiency and facilitating private sector investment, will be needed to support these objectives. However, further fiscal adjustment and reforms do not necessarily need to depress public investment. New financing options for public investment - including from various EU funds and through public-private partnerships - can ease existing fiscal and macroeconomic constraints, but present both new opportunities and challenges that need to be handled carefully.

Keywords: new member states; sustainable growth; convergence; infrastructure investemnt; public-private partnership; EU fund (search for similar items in EconPapers)
JEL-codes: F21 H54 H62 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2008-07-18
New Economics Papers: this item is included in nep-pbe and nep-tra
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