Competitiveness and public debt in times of crisis

Using a combination of the basic definitions that exist in the international bibliography, competitiveness refers to the whole economic life of a country in an internationalized environment and describes the country's ability to achieve continuous improvements in the living standards and employment opportunities of its citizens. It affects all sectors of the economy, products and services produced by the private sector, products and services produced by the public sector, marketable goods and services, non-market goods and services, financial services, businesses operating in the real economy - households and state. At the same time, the economic crisis is still the point of interest, especially for the countries of the European South. Today the Eurozone faces a crisis of both public debt and public deficits, particularly for the countries of the South, with significant consequences both to the development process as well as to the competitiveness of these countries. In particular, the purpose of this paper is to try to analyze the relationship between the deterioration of macroeconomic data and the debt crisis that followed the global financial crisis. The crisis has led European institutions and the member states of the European Union (i.e., Austria, Italy, Belgium, Latvia, Bulgaria, Lithuania, Croatia, Luxembourg, Cyprus, Malta, Czech Republic, Netherlands, Denmark, Poland, Estonia, Portugal, Finland, Romania, France, Slovakia, Germany, Slovenia, Greece, Spain, Hungary, Sweden, Ireland, United Kingdom) to adopt policies in order to address these imbalances, both in fiscal and monetary terms, in direct correlation with the competitiveness of these countries. Our data source is the Organization for Economic Co-Operation and Development (OECD), Eurostat and the annual macro-economic database of the European Commission's Directorate General for Economic and Financial Affairs (AMECO). Specifically, the purpose of this article is to attempt to prove, using an econometric model, the existence or not of a close relationship between the external competitiveness of an economy, as measured by the International Monetary Fund (IMF) and World Bank competitive indices and its public and private sector deficits, as measured by the relevant debts, as well as the correlation of competitiveness with the structure of the external balance country payments.