The ongoing government debt crisis, in some of the biggest Eurozone countries has become a great concern for the European societies. The inability of the governments to cover their expenditures over the last years has resulted into high public debts, followed by a set of economic problems such as recession, unemployment and growth issues, negative balance of payments and fewer investments. Some of the most affected countries of this crisis are Greece, Italy, Portugal, Ireland, and Spain. In this project, I analyze the factors that cause an increase of debt to GDP ratio in a Eurozone country, by estimating a GLS model with random effects, and present some of the factors that cause government crisis in Eurozone countries by estimating a Logistic Binary model. Results suggest that government ineffectiveness, public spending and crisis are the main variables impacting indebtedness of countries; and rule of law and domestic credit to private sector as factors that are causing crisis in Eurozone.
Hasaj, Blendi, "Government Debt Crisis in Eurozone Case Studies: Greece and Italy What can Kosovo learn from the Eurozone crisis?" (2012). Thesis. Rochester Institute of Technology. Accessed from
American University in Kosovo