Public debt east of Eden - how does the euro serve the sustainability of public finances?

Overall, the public debt of European countries was favorably affected by the inflationary processes of the last quarters, mitigating the negative impact of previous overspending on the fiscal balance. In our study, we examine the basic economic-statistical relationships behind the debt accumulation that has taken place since 2008 using linear panel regression estimates. Based on the findings of the literature exploring regional processes, the analysis focuses on the Central and Eastern European and Baltic countries, but extends the evaluation of the factors determining the dynamics of public debt to the European Union as a whole. Although the study points out the contradictory role of the common monetary policy in relation to the sustainable debt trajectory, it also proves that the management of the debt is primarily the responsibility of the domestic economic policy, which cannot be transferred to the authorities at the European level.