This site has been archived on 27/01/17

Navigation path

27/11/2009 : Workshop "External imbalances and public finances in the EU"

The objective of the workshop is to improve our understanding of the intertwining between public finances and external imbalances in the EU

The economics literature suggests that with globalisation and the intensification of international trade and capital flows countries tend to experience growing divergence in their current account performances, thanks to increased capital flows between creditor and debtor countries. Such increased trade and financial integration might thus lead to the building up of large external imbalances heightening the costs associated with the risk of sudden stops in external debt-financing capital flows provoked by the occurrence of large macroeconomic shocks such as the current financial crisis. Existing evidence also shows that countries facing such sudden stops often relied on exchange rate adjustment to restore competitiveness and promote export-led recoveries following the advent of major economic downturns. Such mechanisms, however, no longer exist for euro area countries, providing further prominence to fiscal policy as macroeconomic adjustment device for preventing the building up of external imbalances and smoothing the adverse effects of post-crisis adjustment process on prices and economic growth. In particular, dynamic internal demand favoured by the credit expansion and property prices appreciation has led some euro area countries (such as Ireland or Spain) to experience growing current account deficits, appreciating real exchange rates and significant increase in net foreign liabilities prior the outbreak of the current financial crisis. Other countries (such as Germany or the Netherlands) have, on the contrary, benefited from dynamic export-led growth but appeared also exposed to the sudden halt in world trade with disruptive consequence for public finances and economic growth. Outside the euro area, many recently acceded Member States experienced significant real exchange rate appreciation and fast deteriorating current account balances increasing their exposure to the financial crisis and the sharp cyclical downturn that followed.

The sessions of the workshop will cover the following topics:

  • Global imbalances and fiscal policy
  • Country experiences
  • The Ricardian hypothesis and the role of tax policy
  • The EU's fiscal framework and current account imbalances

Date and venue

27 November 2009, Centre Borschette, CCAB 0D Rue Froissart 36, Brussels

Registration before 6 November 2009

Please complete the registration formrtf(102 kB) Choose translations of the previous link  (Rich text format) and return it by email before Friday 6 November at the latest.



For any queries related to the programme or the organisation of the workshop, please contact the organising team by email or fax (+32-2-299 35 05)

Additional tools

  • Print version 
  • Decrease text 
  • Increase text