How the eu­ro­pean pu­blic debt will end? Causes and so­lu­tions (new Eu­ro­pean laws)

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To­tal ac­cu­mu­la­ted pu­blic debt in the 28 Mem­ber States of Eu­ro­pean Union (EU) was equal to 86.8% of GDP in 2013 fourth quar­ter. It is worst for the Eu­ro­zone debt equal to 93.4% of GDP in the same per­iod(1). Among the ele­ven States which are not Mem­ber of the Eu­ro­zone, on­ly two are above the EU li­mit (60% of GDP)-Uni­ted King­dom and Hun­ga­ry-.

The si­tua­tion of the Eu­ro­zone is get­ting worse by the months with two ex­cep­tions-the Ger­ma­ny and the Aus­tria debt le­vel de­cli­ned a lit­tle bit-. Among the 17 Mem­ber States of Eu­ro­zone, on­ly four res­pect the EU li­mit of the Maas­tricht Trea­ty-Es­to­nia, Du­chy of Luxem­bourg, Fin­land, Slo­va­kia-. Greece171.8% of GDP-, Por­tu­gal-128.7- and Ire­land-124.8- had to be re­scued (IMF and EU).

First cause of the pu­blic debt: bud­get de­fi­cit exis­ted for ages

States ex­ces­si­ve­ly in debt didn’t res­pect the rule of ba­lan­ced bud­get which consists in vo­ting a ba­lan­ced bud­get whe­re­by ex­pen­di­tures don’t ex­ceed in­comes (ex­cept in­vest­ment ex­pen­di­tures). If Mem­ber States of EU set up ge­ne­rous so­cial po­li­cies, the si­tua­tion could step back those so­cial se­cu­ri­ty be­ne­fits. Af­ter Thir­ty Year of growth and full em­ploy­ment suc­cee­ded eco­no­mic slow­down, chro­nic unem­ploy­ment and ageing po­pu­la­tion which ad­ded so­cial ex­pen­di­tures and re­du­ced tax re­ve­nue. Re­forms aren’t suf­fi­cient.

In­no­va­tion im­pact and re­lo­ca­tion of the pro­duc­tion to mer­ging coun­tries can be ad­ded to the cause of the gro­wing unem­ploy­ment.

Since 1975, France has year­ly bud­get de­fi­cits keep re­cur­ring(2). Contra­ry to the Thir­ty Years be­fore 1975, the thir­ty year fol­lo­wing (1975-2005), the growth rate is 2.3% of GDP (5.6% of GDP be­fore). And now the growth rate is­lo­wer than 1% of GDP, and pu­blic ex­pen­di­tures didn’t de­crease till now.

Se­con­da­ry causes od the pu­blic debt: the cri­sis, debt fi­nen­cing sys­tem, tax fraud

Eco­no­mic cri­sis has an un­di­se­red ef­fect on bud­get de­fi­cit

Eco­no­mic re­ces­sion or stag­nant GDP has an un­di­se­red ef­fect on tax re­ve­nue while ex­pen­di­tures in­crease.

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