Abstract: This chapter examines the role of fiscal policies and fiscal institutions. In the boom years, fiscal balances were, in underlying terms, much worse than the headline figures suggested, because fiscal revenues were flattered by unsustainably high domestic demand and incomes. When the recession began in 2009, fiscal balances across the board swung automatically into large deficits as these revenues dried up. Governments in South East Europe (SEE) were thereby left with insufficient room for manoeuvre to apply discretionary measures that could offset the collapse of domestic demand and the resulting fall in output. All this points to a general need to reform fiscal institutions in SEE, while fiscal frameworks in SEE will also need to respect overarching European Union (EU) fiscal rules.
Publication Year: 2015
Publication Date: 2015-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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