Do Fiscal Drivers Matter for Sovereign Risk Spread in EU15?
Do Fiscal Drivers Matter for Sovereign Risk Spread in EU15?

Author(s): Irena Szarowská
Subject(s): National Economy, Economic history, Government/Political systems, Transformation Period (1990 - 2010), Present Times (2010 - today), EU-Accession / EU-DEvelopment, Financial Markets, Fiscal Politics / Budgeting
Published by: Masarykova univerzita nakladatelství
Keywords: debt; budget deficit; sovereign risk spreads; fiscal discipline;
Summary/Abstract: The price of government bonds reflects among other market confidence in governments' commitment towards sustainable fiscal policies. The aim of the paper is to examine the importance of fiscal fundamentals for sovereign risk spread in selected European Union member states in a period 1990-2012 and test if stronger fiscal discipline reduces sovereign risk premium. The empirical evidence is performed on unbalanced panel containing 15 EU countries and panel regression is a basic method of research.

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