The problem of public debt (the case of Spain)

Abstract

The present paper concerns a crucial problem of contemporary public finances, that is the public debt. Apart from the definition, the causes and methods of incurring debt , the present paper demonstrates the acceptable limits of being indebted. Furthermore, the paper presents the scale of public debt in the world and the current status of public finances of Spain (one of the most indebted countries).

The Problem of Public Debt (The Case of Visegrad Group Countries)

“…The definition of public debt sensu largo is to be found in the supplementary documents to the Treatise of Maastricht. According to the afore-mentioned definition, public debt means the totality of liabilities of the treasury to national and foreign entities related to loans taken in financial institutions and directly from the governments of member countries of Paris Club or these which were guaranteed or insured by the governments or their agendas as well as treasury securities remaining to be purchased issued onto the foreign and national market and other registered liabilities of the treasury (Górniewicz, 2013).…”

“…It is to be emphasized that relatively high public debt does not directly threaten the solvency of the government budget if there is primary surplus in the budget (Górniewicz, 2013).…”

“…The most widely accepted criterion is the claim that debt should not violate economic equilibrium. However, it seems that it is such a vague and general statement that apart from the general idea it is difficult to relate the statement to any specific amount of public debt (Górniewicz, 2013).…”