Nguyen Anh Tuan, Nguyen Linh The ongoing public debt crisis in the Europian Union: impacts on and lessons for Vietnam

Abstract: The current public debt crisis in the (European Union) EU began in Greece in November 2009, quickly spreading to Ireland (September 2010), Portugal (January 2012), Spain (June 2012), Italy (November 2012) and most recently, Cyprus (March 2013). This crisis has not only impacted on the Europe but also on the entire global economy, including that of Vietnam. This article will analyze the causes of this crisis, its impacts on the economy of Vietnam and lessons for Vietnam to avoid a potential public debt crisis and guarantee sustainable development. Public debt is a relatively complex concept that most current approaches agree to refer to the sum of debt whose obligation to repay falls on the government of a country . According to the World Bank (WB)’s approach, public debt is understood as the liability of four main groups of institutions: (i) Central government liability, (ii) Local government liability, (iii) Central banking institution liability, and (iv) Liabilities of independent organizations, state-owned enterprises of whose capital the state owns more than 50%, or other organizations whose debt the government has the responsibility to settle should they fails to do this. This definition is similar to that of the Debt Management and Financial Analysis System (DMFAS) of the United Nations Conference on Trade and Development (UNCTAD)

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