Annals of the University of Oradea: Economic Science (Jul 2011)
THE NEED FOR PUBLIC DEBT MANAGEMENT IN THE CONTEXT OF SUSTAINABLE DEVELOPMENT WITHIN THE EUROPEAN UNION
Abstract
Public debt is created when the necessary resources for the socio-economic development of a state are greater than the opportunities that exist at that time. The destination of the necessary resources acquired from foreign markets can be either consumption by raising the standard of living (on short term) or investments in order to reduce the discrepancies in relation to the European Union through investments in infrastructure, jobs, human and technical capital development. The scientific research aims to clarify several key objectives, namely: the theoretical concept and its belonging in the governance politics; the dynamics of public debt in Romania and the identification of specific features of the indebtedness decision, the influence of the current global economic crisis on the Romanian economy, the analysis of Romania's public debt sustainability integrated in the European structures, and proposals for action in order to return as soon as possible to a positive economic dynamics with direct impact on people's standard of living. The theme of this research is contemporary in the context of the financial and economical global crisis and the difficulties in overcoming this period. The need to coordination the fiscal and budgetary policies in Romania, the awareness that the accumulation of a large public debt presents a threat to future generations, the increase of the tax pressure over a market that trends towards globalization and the impact that the aging of the population will have on the public finances sparked public controversy, both in the academic environment and in the media. To continuously borrow resources and maintain a stable level for them requires a sustainable public debt, an important objective of any state's tax policy. A sustainable public debt is the result of the market and of the fiscal and budgetary policy decisions. Although the sustainability of public finances and implicitly of public debt has been an issue extensively debated for over a century, they currently remain vague concepts. Although, intuitively, it is natural to consider that a fiscal policy is sustainable if it avoids financial collapse, there is no generally accepted definition in terms of sustainable public debt, respectively a sustainable level of public debt. The methodology of this research is stressed by the large number of statistical data on public debt dynamics used in the analysis, relevant in this regard are the national and international databases: the National Bank of Romania, Ministry of Public Finances, World Bank, Euro stat, the statistical database of the European Commission, the database of the International Monetary Fund, the Organization for Economic Cooperation and Development, the normative documents consulted in order to ensure the terminological accuracy of the concepts, the numerous theoretical and empirical studies of Romanian and foreign specialists, the views and arguments of scientific researchers with high experience in the field. The personal contribution to the researched field is present throughout this work. Thus, I aimed to clarify some theoretical aspects of the issues addressed, of some concepts and economic notions to elucidate the studied phenomenon by using a large number of statistical data in order to analyses the dynamics of public debt in Romania, in comparison with other former communist countries and to formulate proposals for a long-term sustained recovery and a sustainable economic growth.
