Composition and Determinants of Fiscal Adjustment’s Success in the EU27 Context

Laura Obreja Brasoveanu

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Abstract:

Current context brings new challenges posed by the decrease of public revenues,through lowering the tax base and the capacity to collect taxes, and by the inability to adjust the public expenditures. All countries face the challenges of fiscal adjustment. The aim of this paper is to identify the determinant factors of success for fiscal adjustment episodesin UE 27 context. The considered factors are the need, the size and the composition of the fiscal adjustment. The result of the logit models concluded that significant fiscal adjustments lead to sustainable deficit reduction, while the composition of fiscal adjustments through policies based on public expenditure or revenues does not significantly influence the probability of success.

 

 

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