Academy of Economic Studies Bucharest

Faculty of Finance and Banking

The influence of Great Recession on

fiscal policies and economic growth

Bucharest
-2019-
Introduction
The Government has a huge impact in a nation because one of it’s important
attributes is to regulate the fiscal and policy for shaping a proper economy. There is no
doubt that the main issues in the economic activity are the need of monetary resources,
which is higher than the existing funds, and the developing a budget at any stage,
according to the principle of budget balance. Personally, I find this topic quite
appealing and I want to outline the relation between the government deficit and the
economic growth throughout a 10-year period (2008-2018), emphasizing the trends
after the recession in 2009. The main goal is to focus on the concepts regarding fiscal
policy and the economic behaviour of 25 EU member countries.

Keywords
Fiscal Policy, GDP, Government Deficit, Economic Growth.

JEL Classification
E62, F43, H60

Fiscal Policy –Framework

Fiscal policy requires a mix of measures and actions of the state regarding taxes,
their role in the formation of budgetary revenues and the financing of budgetary
expenses, as well as their collection and use can be instrument of stimulating the
economic growth. The fiscal policy is in force for the government, the care usually
provided through the Ministry of Finance and is a form of indirect intervention of the
state in the economy. Therefore, an insurance of men must be ensured, after which it is
macroeconomically balanced for the market of goods and services (the real economy)
under conditions of encouraging the business environment and an investigation. With
the help of fiscal policies, the authorization to regulate can influence the business
cycle, interest rates, unemployment rate and inflation, in a constant effort to control an
economy. In contrast, excessive and unpredictable taxation can lead to
macroeconomics imbalance, when a relaxed fiscal policy, with lower tax rates (ex
VAT, profit tax, etc.) can stimulate economic growth, through increased investigation
and consumption. Using the fiscal policy, government can manage the economy’s
short-term and long-term growth rate by affecting the level of Gross Domestic Product
(GDP) and the economic growth rate can be measured by the real rate of growth in a
country’s total output of goods and services.
The main objectives that a fiscal policy tends to achieve are:
1) Boosting employment levels
 2) Maintain and stabilize the economic growth rate
3) Maintain and stabilize price levels
4) Encourage economic development
5) Raising the standard of living
6) Maintaining the equilibrium of Balance of Payments
There are two opposite types of fiscal policies: contractionary and expansionary.
In the first scenario, the government reduces the spending or raising the net
taxes, which can result in booms and recessions. This method can affect the economy
and it in the end, it can be pursued to an expansionary fiscal policy, which is a direct
expansion in spending that raises the demand for goods and services. In addition,
households can spend more money on consumption because their disposable income
have increased.
It seems that the recent recession has raised questions on how the fiscal policy
should be conducted due to the high levels of deficits, outstanding debt and upward
pressure on interest rates, which the EU countries have less desired to find a stimulus
to eliminate the problem, or at least to diminish it. At the same time, the crisis is
expected to have some significant consequences for all labor markets. Many people
have lost their jobs and the increase of unemployment manifested rapidly all around
the world, not only in European countries. In 2008, the EU economy clearly suffered
from the global economic downturn and over the course, it appeared contractions in
GDP and affected the output in industry, construction and retail.
Automatic stabilizers are the main factors in a business cycle that can intensify
expansionary fiscal policy during an economic collapse and contractionary fiscal
policy during a boom period without taking a relevant policy decision. The number of
people that do not have a job may increase rapidly in a recession and some the
unemployment benefits may influence the government expenditure as well, because
the personal income tax decreases, factors that are in an inverse relation. Thus,
spending raises, the income of the household’s declines, phenomenon that corresponds
to countercyclical fiscal policy. Fiscal policy institutions like councils can directly
react to these trends in the economic situation.
There are advantages and disadvantages of managing the fiscal policy in a way
that can increase the potential output in economy, stabilize the economy and reduce
income inequality on long term. The costs of a short-term growth rate are deficits, time
lags and the concept of “crowding out”.
Budget Deficit- General Knowledge
Budget deficit in general terms refers to the difference between the government
spending and its revenues, commonly acquired from tax proceeds. However, the
government also has the tax burden from budget deficit to contend with besides the
monetary and fiscal burden of the recurrent and development expenditure. So, a more
profound definition of the total budget deficit is the difference between a government
total spending including its payment on taxes, and the total revenues collected from
taxes (Blinder, 2009).
Variation in the budget deficit is a function of the dynamism in the socio-
economic and political structure at a specific period time. In addition, there is the
government policy intervention to counter the course of budget deficit towards
undesired and unanticipated trends. Government total spending in a financial year in
terms of social responsibilities such as security, health care and education is finitely
fixed at the size of its populations. However, the economic activity which earn a
government’s revenues through taxes, is infinitely varied by the market forces, and this
is what creates the budget deficit.
Budget deficit is expressed as a cyclical, structural or a fiscal gap. Cyclical
deficit is variable between the various, levels of business, whereas structural deficit is
fixed at a finite amount of government spending. Fiscal gap measure of budget deficit
was devised to overcome the complexity incurred in measuring deficit at the
presumptuous business cycle levels. Its measured as a percentage of the GDP (Gross
Domestic Product) to illustrates the interventions required to amend the deficit.

Literature review
There is no doubt that it exists substantial literature and relevant studies that are
dealing with this issue. In the Baltic States, there has been confirmed a significant
positive correlation between public-debt-to GDP ratio by Stankeviciene and
Lakstutiene (2013). On the other way around, public debt to GDP ratio has been an
obstacle due to its negative effect on long term economic stability, statement built
upon Rogoff-Reinhart Thesis, with a 90% threshold (Mencinger, Aristovnik and
Verbic, 2015).
No one reached to an agreement that EU has managed efficiently the period after
the 2008 crisis. EU and its member states have been criticised by several authors for
their reactions in that period (Khoury, 2015; Hermann, 2013) and other authors believe
that EU had a positive effect on combating the crisis and countries like Greece, Spain
and Portugal needed intensive involvement from the union (Benchescu,2014). It
should be noted that the macroeconomic imbalances that threaten the stability are not
properly diminished.
 Since the summer of 2007, the monetary authorities have begun to implement
various measures with the purpose of improving the liquidity of financial institutions.
When lending interbank crashes culminated in the collapse of Lehman Brothers in
September 2008, central banks proceeded to mass injections of liquidity into the
banking system, relaxing the requirements regarding the guarantees of the refinancing
operations. In general, it is considered that the Bank The European Central has acted
promptly and effectively in this direction, especially in comparison with the action of
the Bank of England, in which case the objections regarding the acquisition of the
illiquid assets of banks were, in part, critical to Northern Rock's collapse (Buiter,
2007).
The current financial crisis calls for the solution of three central problems: lack
of liquidity markets, uncertainty about the value of "questionable" assets and
insufficient capital. Emergency measures have been adopted in response to both
Europe and other countries of the world financial shocks. The deposit guarantee
ceilings have been preventively raised in most jurisdictions, even if not in a consistent
manner. Also, they were short selling (banned) is prohibited / limited.
Other researchers like Barro (1974), suggest that increased bonds do not
influence the household’s level of wealth in order to consume more. It is a possibility
that taxpayers save money from cut charges at the moment even if they believe that the
permanent tax cu did not happen within the economy. Therefore, Barro (1974)
estimated an econometric model by which people save the loan borrowed from the
government, according to the budget deficit, and pay it as an interest charge which
means that on the long-run, this method will not reduce the emergency.

The Keynesian Theory

Academic researchers and elite economists argued over centuries the purpose of
the Fiscal Policy and how it is affecting the economy. John Maynard Keynes (1936)
presented his main ideas in “The General Theory of Employment, Interest and Money”
in 1936 and therefore, Keynesian theory advocates developed his theory during The
Great Depression which highlighted the stability of the output, which is determined by
the public and private spending, over the business cycle. Other Economists consider
whether countercyclical fiscal policy is stimulating the private sector during periods of
financial stress, times like the burst of 2008 economic crisis and The Great Recession.
It seems like the debate is based more on the theoretical approach because it is hard for
private agents to optimally smoothen their consumption during periods of adverse
financial conditions due to the lack of liquidity.
The Keynesian macroeconomic hypothesis shows that the budget deficit ought
to be connected as a mean of improving economic status and as an appropriate policy,
should empower lawmakers to maximise the social welfare. Hence, in Keynesian point
of view, governments bargain with the factors of production growth and
unemployment; it moreover takes after the policy that minimises the contrast between
real unemployment and typical level of unemployment. Subsequently, Keynesian
hypothesis predicts that the budget shortage is negatively correlated with
unemployment; even if the budget deficit is positively related with economy’s real
growth rate.

The Ricardian Theory

David Ricardo (1817) suggests that the public deficit does no real harm to the
economy because it represents trading taxes in the future for today’s taxes and should
have a long-term effect on economic growth. The population should adjust its
spending schedule and savings, to take into consideration future increases in taxes and
duties. He initially presented this hypothesis, which was at last completed by Robert
Baroo. This hypothesis made based on the two assumptions of rational desires that
households are prospective and their visions until tax collection. The government
would have no choice of increasing duties within the future in arrange to reimburse the
obligations and interests as taxes had been diminished and budget deficit was provided
through borrowing. According to this opinion, Ricardo accepts that individuals found
out by encounter that expanded government bond as a result of decreased charges
offers a brief wage (revenue/income) for the person in present. Increased public saving
offers more credit to families and entities because households tend to save more
money to supply higher tax paying when the government obligation is higher. It seems
that the increased loan demand by government is influenced by higher savings; as a
result the interest rate and the permanent revenue remain constant even if the taxes
tend to decrease, family units spare temporary income with no alter in order to pay
liabilities on the long run, in term of reserve funds, caused by current tax cuts. Any
reduction in taxation system must be steady with increment in future charges and the
augmenting of the private sparing would completely compromise the decrease in
public sector savings.

Inflation Theory
Inflation is generated by the existence of a budget deficit, which means that in
the economy there is a greater amount of monetary resources. If the budget deficit is
covered by the monetary issue, the impact on inflation will be much stronger. The
central bank has as main objective the limitation of inflation, the monetary authorities,
will take the measures to increase the reference interest, which can attract speculative
operations, which leads to the consolidation of the national currency and to the
discouragement of exports. Therefore, another consequence of the budget deficit is the
appearance of the current account deficit. Van Wijnbergen (1991) demonstrates, based
on some theoretical models, the impact of the budget deficit on inflation, but from the
"inflationary theory" of the balance of payments, and points out the existence of a
possible indirect link between the budget deficit and inflation. Hoelscher (1986)
appreciates the fact that inflation erodes the real size of government debt and, as a
result, this can be a transfer of wealth from creditors (government securities holders) to
debtors (public authorities), which would result in a deficit reduction.

Methodology
The purpose of this paper is to outline the long-run relationship between
government deficit and the growth rate in case to investigate how the budget deficit
had an impact after the 2009 recession on the economic development in Europe.
Within the setting of the suitable econometric model, specifically the regression
model, budget shortfall is spoken to as a subordinate variable (Y), and the gross
domestic product as an independent (X) variable. There should be assessed what is the
significant impact and how noteworthy it is and whether it is important to be conveyed
in long term point of view. To be more specified, it should be clarified what is the
association between public finance and economic development in a sample of 25
potential countries from Europe. A detailed research can also show if the taxation
system has an impact on a long-term period, influencing economic growth, hence
boosting financial performances.

Regression Equation: Y = a + bX

SUMMARY
OUTPUT

Regression Statistics
Multiple R 0.090740776
R Square 0.008233888
Adjusted R Square -0.03488637
Standard Error 2.335914263
Observations 25

ANOVA
  df SS MS F Significance F
Regression 1 1.041927135 1.041927135 0.190952 0.666200986
Residual 23 125.4993952 5.456495443
Total 24 126.5413223      

Standard
  Coefficients Error t Stat P-value
0.000028214
Intercept -3.35615341 0.645010482 -5.20325406 9
X Variable 1 0.159433736 0.364853441 0.436980217 0.666201

Budget deficit   Growth rate  

-
3.16181818 1.21890909
Mean 2 Mean 1
0.26137426
Standard Error 0.4592409 Standard Error 6
1.07272727
Median -3.1 Median 3

2.29620449
Standard Deviation 8 Standard Deviation 1.30687133
5.27255509 1.70791267
Sample Variance 6 Sample Variance 2
Kurtosis -0.40326954 Kurtosis 2.33482016
Skewness -0.17642973 Skewness -0.07092257
8.97272727 6.73636363
Range 3 Range 6
Minimum -7.85454545 Minimum -2.38181818
1.11818181 4.35454545
Maximum 8 Maximum 5

Count 25 Count 25
Confidence Level 0.94782663 Confidence Level 0.53944997
(95.0%) 2 (95.0%) 1

X Variable 1 Residual Plot

6
4
2
Residuals

0
-3 -2 -1 -2 0 1 2 3 4 5

-4
-6
X Variable 1
 X Variable 1 Line Fit Plot
2
0
-3 -2 -1 0 1 2 3 4 5
-2
Y
-4 Predicted Y
Y

-6
-8
-10
X Variable 1

Budget Deficit and Economic Growth relationship

1) R square (R2) equals 0.00823389. It means that the predictors (Xi) explain 0.8% of
the variance of Budget Deficit.
2) Adjusted R square equals -0.0348864.
3) The coefficient of multiple correlation (R) equals 0.0907408. It means that there is a
very weak direct relationship between the predicted data (ŷ) and the observed data (y).

Goodness of fit
1) Overall regression: right-tailed, F(1,23) = 0.190952, p-value = 0.666201. Since p-
value ≥ α (0.05), we accept the H0.

2) The linear regression model, Y = b0+ b1X1 +...+bpXp, doesn't provide a better fit
than the model without the independent variables resulting in, Y = b0.

3) The following independent variable is not significant as predictors for Y: X, which

means it was excluded from the model.

4) The remaining variable: X is not significant

5) The Y-intercept (b): two-tailed, T = -5.203254, p-value = 0.0000282149. Hence b is

significantly different from zero.
Case study
In the last 20 years, the activities of the international banking and financial
systems were severely affected by two waves of crises, which strongly marked the
relations between citizens, the system and the national and supranational authorities.
Nor was Romania circumvented by this scourge of chaotic lending. However, we can
say that the economic situation that Romania is going through is rather an internal
crisis, determined by an economic growth based on consumption.
In the following study case, I will make a comparison between Romania’s
government deficit with other powerful EU state to emphasize the performance of our
country during the recession. I will also take 2009, 2015 and 2018 as reference years
to examine how did the subjects recover from the disaster.
In the Graph 1, I chose a sample of 6 subjects, which are countries from Eastern
Europe during the recession period. It is no doubtable that the budget deficit of those
countries decreased significantly, but in case of Poland, the fluctuations changed
drastically. Romania follows in its footsteps, although the deficit stops at 11 million
euros and easily stabilizes towards the balance to 8.6 million euros.
 Geo/time 2007 2008 2009 2010
Bulgaria 357.2 590.3 -1,514.3 -1,192
Latvia -116.3 -1,023.9 -1,784.1 -1,531
Lithuania -236.8 -1,008 -2,452.6 -1,934.5
Hungary -5,141.6 -4,038.3 -4,422.8 -4,341.9
Poland -5,816 -13,183 -22,997 -26,762
Romania -3,484 -7,848.1 -11,346 -8,680.2

unit: Million euros

Source: Eurostat

The line graph below illustrates the Romanian’s budget shortage as a percentage
from gross domestic product at 10-year interval. It can be seen that the level of the
government deficit dropped down dramatically from -2.7 in 2007 to -9.1 in 2009. The
rate continues to grow gradually, hitting the peak in 2015, which is -0.6. Until 2018, it
seems that the rate did not maintained the same level, which led to a strike from -0.6 to
-3.7.
In order to target our goal, the descriptive analysis will help us to understand
better the place where Romania is in relation to the other countries. It is important the
fact that the mean had significant changes over the years, from -6.412 (2009) to -0.472
(2015).
The mean and the median both measure central tendency, but unusual values, called
outliers, affect the median less than they affect the mean because it is the midpoint of
the dataset. Only in 2018, the median (-0.4) and the mean (-0.47) are quite close to
each other, which means that the shape of distribution is almost symmetric from the
lowest to the highest values. In 2009 and 2015, there is not a tight enclosure between
the results as in the year 2018, which indicates an uneven distribution.

The mode represents the value that occurs most often and is not affected by the
extreme values. In the dataset, the majority of countries in 2009 had -5,4, value that
equals with the median. Although in 2015 the mode increased, which means that
almost all governments decreased their public spending, getting to a mode of -2.4. For
example, Portugal and Ireland had huge budget shortages in 2009 and the numbers
were -9.9 and -13.8. In 2018, the balance had been adjusted and the values increased to
-0.4 and 0.1.

The maximum and minimum are very sensitive to outliers. This is for the simple
reason that if any value is added to a data set that is less than the minimum, then the
minimum changes and it is this new value. In this case study, we can observe that both
increased over time and Romania is almost closer to the minimum budget deficit.

Years Budget
deficit
(% lvl
gdp)
2007 -2.7
2008 -5.4
2009 -9.1
2010 -6.9
2011 -5.4
2012 -3.7
2013 -2.1
2014 -1.2
2015 -0.6
2016 -2.6
2017 -2.6
2018 -3.0

Unit: percentage of gdp

GEO/TIME 2009 2015 2018
Belgium -5.4 -2.4 -0.7
Bulgaria -4.0 -1.7 1.8
Denmark -2.8 -1.2 0.8
Germany -3.2 0.9 1.9
Estonia -2.2 0.1 -0.6
Ireland -13.8 -1.9 0.1
Greece -15.1 -5.6 1.0
Spain -11.3 -5.2 -2.5
France -7.2 -3.6 -2.5
Croatia -6.0 -3.3 0.3
Italy -5.1 -2.6 -2.2
Cyprus -5.4 -1.0 -4.4
Latvia -9.5 -1.4 -0.7
Luxembourg -0.7 1.4 2.7
Hungary -4.7 -2.0 -2.3
Netherlands -5.1 -2.0 1.5
Austria -5.3 -1.0 0.2
Poland -7.3 -2.6 -0.2
Portugal -9.9 -4.4 -0.4
Romania -9.1 -0.6 -3.0
Slovenia -5.8 -2.8 0.8
Slovakia -8.1 -2.7 -1.1
Finland -2.5 -2.4 -0.8
Sweden -0.7 0.0 0.8
United -10.1 -4.6 -2.3
Kingdom
Unit: percentage of gdp

2009   2015   2018  

Mean -6.412 Mean -2.104 Mean -0.472

Median -5.4 Median -2 Median -0.4
Mode -5.4 Mode -2.4 Mode 0.8
Minimum -15.1 Minimum -5.6 Minimum -4.4
Maximum -0.7 Maximum 1.4 Maximum 2.7
Count 25 Count 25 Count 25

Conclusion
The propagation of these theories makes the degree of uncertainty regarding the
evolution of economic variables extremely high. This contributes, in turn, to the
accentuation of the crisis by the negative effects it has on expectations and by
increasing the degree of prudence at the level of consumers and economic agents.
In Romania, the response to the adverse effects of the crisis cannot be similar to the
one made by some European states. There are some differences between the Romanian
economy and these economies, which do not allow simply copying the packages of
measures developed there. In essence, it is about the Romanian economy it has a large
current account deficit, which indicates its dependence on external financing. There is
a choice between the orderly reduction of this deficit or its reduction by the market in
the current conditions of tension and mistrust, with dramatic consequences for the
economic growth.
In addition to this, the government can also contribute to improving the
perception of foreign investors through measures such as improving the absorption
capacity of European funds and thus, to a certain extent, replacing private external
financing with public external financing or by creating new workforce in under-
utilized fields (infrastructure, tourism, food, etc.), which will gradually take over the
role of economic growth. In general, the conclusion of financing agreements with
international bodies, starting with the European Commission and the European
Investment Bank, to offset the significant decrease in private equity inflows.

Appendix
1) Real GDP Growth Rate
 time 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
geo (Labels)
Belgium 3.7 0.4 -2 2.9 1.7 0.7 0.5 1.6 2 1.5 2 1.5
Bulgaria 6.6 6.1 -3.4 0.6 2.4 0.4 0.3 1.9 4 3.8 3.5 3.1
Denmark 0.9 -0.5 -4.9 1.9 1.3 0.2 0.9 1.6 2.3 3.2 2 2.4
Germany 3 1 -5.7 4.2 3.9 0.4 0.4 2.2 1.7 2.2 2.5 1.5
Estonia 7.6 -5.1 -14.4 2.7 7.4 3.1 1.3 3 1.8 2.6 5.7 4.8
Ireland 5.3 -4.5 -5.1 1.8 0.3 0.2 1.4 8.6 25.2 3.7 8.1 8.2
Greece 3.3 -0.3 -4.3 -5.5 -9.1 -7.3 -3.2 0.7 -0.4 -0.2 1.5 1.9
Spain 3.6 0.9 -3.8 0.2 -0.8 -3 -1.4 1.4 3.8 3 2.9 2.4
France 2.4 0.3 -2.9 1.9 2.2 0.3 0.6 1 1.1 1.1 2.3 1.7
Croatia 5.3 1.8 -7.4 -1.5 -0.3 -2.2 -0.5 -0.1 2.4 3.5 3.1 2.7
Italy 1.5 -1 -5.3 1.7 0.7 -3 -1.8 0 0.8 1.3 1.7 0.8
Cyprus 5.1 3.6 -2 2 0.4 -3.4 -6.6 -1.9 3.4 6.7 4.4 4.1
Latvia 10 -3.3 -14.2 -4.5 6.3 4.1 2.3 1.9 3.3 1.8 3.8 4.6
Lithuania 11.1 2.6 -14.8 1.5 6 3.8 3.6 3.5 2 2.6 4.2 3.6
Luxembourg 8.4 -1.3 -4.4 4.9 2.5 -0.4 3.7 4.3 4.3 4.6 1.8 3.1
Hungary 0.2 1.1 -6.7 0.7 1.8 -1.5 2 4.2 3.8 2.2 4.3 5.1
Netherlands 3.8 2.2 -3.7 1.3 1.6 -1 -0.1 1.4 2 2.2 2.9 2.6
Austria 3.7 1.5 -3.8 1.8 2.9 0.7 0 0.7 1 2.1 2.5 2.4
Poland 7 4.2 2.8 3.6 5 1.6 1.4 3.3 3.8 3.1 4.9 5.1
Portugal 2.5 0.3 -3.1 1.7 -1.7 -4.1 -0.9 0.8 1.8 2 3.5 2.4
Romania 7.2 9.3 -5.5 -3.9 2 2.1 3.5 3.4 3.9 4.8 7.1 4
Slovenia 7 3.5 -7.5 1.3 0.9 -2.6 -1 2.8 2.2 3.1 4.8 4.1
Slovakia 10.8 5.6 -5.5 5.7 2.9 1.9 0.7 2.8 4.8 2.1 3 4
Finland 5.3 0.8 -8.1 3.2 2.5 -1.4 -0.9 -0.4 0.6 2.6 3.1 1.7
Sweden 3.4 -0.2 -4.2 6.2 3.1 -0.6 1.1 2.7 4.4 2.4 2.4 2.2
United Kingdom 2.4 -0.3 -4.2 1.9 1.5 1.5 2.1 2.6 2.4 1.9 1.9 1.4

2) Budget Deficit (percentage of GDP)

time 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
geo (Labels)
Belgium 0.1 -1.1 -5.4 -4.1 -4.3 -4.3 -3.1 -3.1 -2.4 -2.4 -0.7 -0.7
Bulgaria 1.1 1.6 -4 -3.1 -2 -0.3 -0.4 -5.4 -1.7 0.1 1.1 1.8
Denmark 5 3.2 -2.8 -2.7 -2.1 -3.5 -1.2 1.1 -1.2 0.2 1.7 0.8
Germany (until 1990 former territory of the FRG)
0.3 -0.1 -3.2 -4.4 -0.9 0 0 0.6 0.9 1.2 1.2 1.9
Estonia 2.7 -2.6 -2.2 0.2 1.1 -0.3 0.2 0.7 0.1 -0.5 -0.8 -0.6
Ireland 0.3 -7 -13.8 -32.1 -12.8 -8.1 -6.2 -3.6 -1.9 -0.7 -0.3 0.1
Greece -6.7 -10.2 -15.1 -11.2 -10.3 -8.9 -13.2 -3.6 -5.6 0.5 0.7 1
Spain 1.9 -4.6 -11.3 -9.5 -9.7 -10.7 -7 -5.9 -5.2 -4.3 -3 -2.5
France -2.6 -3.3 -7.2 -6.9 -5.2 -5 -4.1 -3.9 -3.6 -3.5 -2.8 -2.5
Croatia -2.2 -2.8 -6 -6.5 -7.9 -5.4 -5.3 -5.3 -3.3 -1.1 0.8 0.3
Italy -1.3 -2.6 -5.1 -4.2 -3.6 -2.9 -2.9 -3 -2.6 -2.4 -2.4 -2.2
Cyprus 3.2 0.9 -5.4 -4.7 -5.7 -5.6 -5.8 -8.7 -1 0.1 1.7 -4.4
Latvia -0.5 -4.2 -9.5 -8.6 -4.2 -1.2 -1.2 -1.4 -1.4 0.1 -0.5 -0.7
Luxembourg 4.2 3.3 -0.7 -0.7 0.5 0.3 1 1.3 1.4 1.8 1.4 2.7
Hungary -5 -3.7 -4.7 -4.4 -5.2 -2.3 -2.5 -2.8 -2 -1.8 -2.4 -2.3
Netherlands -0.1 0.2 -5.1 -5.2 -4.4 -3.9 -2.9 -2.2 -2 0 1.3 1.5
Austria -1.4 -1.5 -5.3 -4.4 -2.6 -2.2 -2 -2.7 -1 -1.5 -0.7 0.2
Poland -1.9 -3.6 -7.3 -7.4 -4.9 -3.7 -4.2 -3.6 -2.6 -2.4 -1.5 -0.2
Portugal -2.9 -3.7 -9.9 -11.4 -7.7 -6.2 -5.1 -7.4 -4.4 -1.9 -3 -0.4
Romania -2.7 -5.4 -9.1 -6.9 -5.4 -3.7 -2.1 -1.2 -0.6 -2.6 -2.6 -3
Slovenia 0 -1.4 -5.8 -5.6 -6.6 -4 -14.6 -5.5 -2.8 -1.9 0 0.8
Slovakia -2.1 -2.5 -8.1 -7.5 -4.5 -4.4 -2.9 -3.1 -2.7 -2.5 -1 -1.1
Finland 5.1 4.2 -2.5 -2.5 -1 -2.2 -2.5 -3 -2.4 -1.7 -0.7 -0.8
Sweden 3.4 1.9 -0.7 0 -0.2 -1 -1.4 -1.5 0 1 1.4 0.8
United Kingdom -2.7 -5.1 -10.1 -9.3 -7.5 -8.2 -5.5 -5.6 -4.6 -3.4 -2.4 -2.3

Source: Eurostat

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