POLITICAL BUDGET CYCLES IN EU

The research on political budget cycles becomes especially relevant during economic recessions because as the elections are approaching the politicians have other interests than addressing to serious economic problems. As EU countries are depended on each other in political and economic terms, the decisions of one country may have an impact on other countries. Political budget cycles also tend to descend. The objective of this paper is to investigate if there were significant signs of political budget cycles in all EU member states during 1995 - 2009; what are the countries where fiscal indicators are changing the most during election periods. The results showed that politicians of many EU countries rely on a number of fiscal indicators as a means of manipulation during election periods, seeking opportunistic goals. However, in developed EU countries budget cycle is a more common phenomenon than in developing countries. In addition, the manipulation of the expenditures is a more popular tool among politicians than the manipulation of revenue during election periods.