6533b851fe1ef96bd12a9432

RESEARCH PRODUCT

EUROPEAN UNION’S COMPETITIVENESS IN TERMS OF COUNTRY RISK AND FISCAL DISCIPLINE

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Underneath the umbrella of national competitiveness there are microeconomic and macroeconomic factors, but the recovery and the revival of a state competitiveness must be based on a strategy developed and coordinated centrally and implemented in strategic areas of the economy. In this respect, this paper aims to analyze the situation of European Union’s competitiveness in terms of country risk and fiscal and budgetary discipline of the Member States, based on empirical data. Therefore, this study’s analysis includes the following two steps: first, a segmentation of the European Union by determining distinct groups of countries according to national competitiveness (GCI), public debt (PD) and budget equilibrium (BD); and second, a factor analysis performed on the resulted clusters of countries based on GCI, PD, BD and CDS (credit default swap).