Mihaiu Diana Marieta

University of Sibiu

Romania

cindea_diana@yahoo.com

Analysis of public debt in the European Union - issues related to its sustainability

Received: May, 2014

1st Revision: June, 2014

Accepted: September, 2014

ABSTRACT. The purpose of this paper is to analyze the public debt in the EU member countries based on the “golden rule” of state indebtedness. This study analyzes the type of relationships that exist in the European Union (EU27) in the period 2008-2012, between the level of the public debt and: public investments, unemployment rate and economic growth in order to identify the destinations and effects of the public debt that represent pillars in the analysis of its sustainability. The analysis revealed an inverse relationship between public debt and public investments, thus increasing the public debt is not listed in stimulating public investments, but on the contrary it can be noticed their decline.

DOI: 10.14254/2071-8330.2014/7-2/2

JEL Classification: H63.

Keywords: public debt, public investment, unemployment, GDP growth.