An EU-funded project provides insights on external and internal imbalances in South Mediterranean countries

14-09-2018
FEMISE
FEMISE
Copyright: FEMISE

The FEMISE Policy Brief series MED BRIEF aspires to provide Forward Thinking for the EuroMediterranean region. The briefs contain succinct, policy-oriented analysis of relevant EuroMed issues, presenting the views of FEMISE researchers and collaborators to policy-makers.

This MED brief provides insights on the medium and the long term consequences of the external and internal imbalances in the South Mediterranean (South Med) countries over the period of the last twenty years, trying to identify the main areas of macroeconomic imbalance in these countries and the key aggregates which seem to drive wider developments in their macroeconomic and fiscal positions.

The results indicate that macroeconomic imbalances in the South-Med region have to do predominantly with the external position of these countries (external debt, net foreign asset positions and, less so, the current account balance) and are only secondarily related to problems of the domestic fiscal position (budget deficits and government debt).

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