European Citizens Versus Budget Stability. Do Sound Fiscal Imbalances Affect Social Living Conditions? The Case of EU Poverty Rates and Social Protection Levels’ Reaction
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Titel:
European Citizens Versus Budget Stability. Do Sound Fiscal Imbalances Affect Social Living Conditions? The Case of EU Poverty Rates and Social Protection Levels’ Reaction
Beschreibung:
This article focuses on the sound and significant fiscal imbalances in the 2008-2018 period the EU Member States attained, mainly due to the last global financial crisis. A coordinated response, primarily induced by Stability and Growth Pact, was required to restore budget equilibrium and prevent eventual sovereign debt frictions. Moreover, this solid and restrictive balanced budget rule forbids Euro Area policymakers to run public deficits based on spending-to-GDP ratios, conditioning multiyear fiscal policy path. The primary strategy lies in placing the European citizen at the center of the analysis, particularly by quantifying the impact of budget stability on their daily lives through specific social indicators based on EUSILC surveys. In other words, it is pursued to contrast if governments’ reaction to extreme deficit values implies a citizenship’s welfare loss pattern. The novelty of this paper lies in the chosen approach. Previous works mostly focused on a more macroeconomic outlook, trying to capture how economic growth rates and productivity evolution directly impacted Europeans' daily lives. Instead, the research line in the present paper contrasts behavioural patterns in the social living conditions, trying to isolate and quantify the earlier effects and their reflection over time. This challenging link between budget balance and social indicators has not been previously posed. Developed models in this study contribute to a better understanding of the implemented public policy impact through robust results. In such a way, policymakers’ tradeoff between macro stabilization and the evolution of socioeconomic indicators. The basic issue is whether there is a relationship between cut spending and social indicators, focusing on poverty and social protection indicators as two revealing areas of the impact on living conditions