Prior to a recovery in 2007 and 2008, Germany's public finances had deteriorated substantially since reunification. The lack of efficient expenditure and budget rules was a crucial factor in this development. To limit future debt, proposals for a new budget rule are currently being discussed in...

Unemployment has fallen considerably during the recent period of record growth in the Czech economy. This has ended a long period of relatively jobless growth during which GDP was driven by advances in productivity and capital deepening rather than rises in employment. This country focus...

In 2005 the current account deficit attained 7½% of GDP, its worst position of the last 25 years, and in 2006 it might reach 8½%. Traditionally, Spain’s trade deficit has been partially offset by surpluses in other external balances, particularly service trade, as a result of large net...

The Czech Republic has been one of the primary recipients of foreign direct investment (FDI) among Central and Eastern European countries. Soon after transition, it attracted the attention of foreign investors based on sound economic fundamentals and the opportunities offered by early...

Turkey is currently introducing a comprehensive pension reform, which aims at unifying the currently disperse system and reducing the significant - and rapidly growing – social security deficit from 4.8% of GDP in 2005 to less than 1% of GDP by 2035. The cumulative value of the deficits over...

National fiscal frameworks can complement the EU budgetary surveillance procedure. Poland has traditionally had a debt rule, but it did not discourage governments from running high deficits. High expenditure (mainly on social benefits) has been identified as one of the main sources of large...

Following several years of low growth Germany is presently enjoying a relatively strong recovery. With unemployment falling at record speed and fiscal consolidation progressing, the upswing is set to continue in spite of uncertainties surrounding the VAT increase of January 2007. This Country...

Since the early 1990s Croatia has managed a rather successful transition process with solid growth, low inflation and exchange rate stability. Better integration into international financial markets, capital account liberalisation and banking sector reform have facilitated access to foreign...

In 2006 the external net borrowing requirement of the Spanish economy was almost 8% of GDP, after having been in balance between 1993 and 1998. This increased borrowing requirement is the financial mirror image of a growth model, in which corporate and households' investments are generating an...

In recent years, Slovakia has introduced wide-ranging reforms in the tax, pension, social and health care systems. These reforms have increased incentives to work, to create jobs and to invest, and have thus fostered growth and economic catching-up. The supply-side driven growth has so far...