№39: Solutions to Public Debt Crises in the EU: Seek Returns on That Investment (Views from Slovakia)
№39: Solutions to Public Debt Crises in the EU: Seek Returns on That Investment (Views from Slovakia)

Author(s): Peter Goliaš, Eugen Jurzyca
Subject(s): Supranational / Global Economy, Governance, Economic policy, International relations/trade, Economic development, Public Finances, Fiscal Politics / Budgeting, Geopolitics
Published by: PISM Polski Instytut Spraw Międzynarodowych
Keywords: European Union; public debt crisis; financial assistance; Eurozone; financial stability mechanisms; economic recovery;
Summary/Abstract: The purpose of providing financial assistance to indebted eurozone countries is to avoid uncontrolled bankruptcies that could lead to a breakdown of the euro area with severe negative consequences for all members of the EU. There is a high probability that the loans provided via the stability mechanisms will not be fully recovered. Nevertheless, the long-term benefits of those loans are expected to exceed the costs. Therefore, this form of financial assistance should be regarded as an investment that has its own rate of return, one that can be controlled for by insistence on adherence to certain rules of behaviour and diligent oversight.

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