The euro zone countries solvency: a compelling case for fiscal integration

Posted on 25. Jan, 2011 by Jean Jacques Ohana in Weekly Focus

Although market perception on euro zone solvency stress has noticeably improved, the less industrialized countries in the euro zone are still facing a major solvency problem.
A country can achieve debt stabilization on the condition that the nominal growth exceeds the total budget deficit.
More precisely, it can be proven that the minimal primary balance (budget balance [...]