Table I: Pooled time-series analysis, dependent variable: current balance

	(1)	(2)	(3)	(4)	(5)
Dep. Var.	Current Budget Balance (including interest payments) as % of GDP
Lagged current balance	0.907	0.898	0.874	0.873	0.870
Lagged current balance	(41.25)**	(39.02)**	(34.96)**	(35.66)**	(35.27)**
GDP growth	0.354	0.337	0.373	0.388	0.383
GDP growth	(9.47)**	(8.80)**	(8.41)**	(8.85)**	(8.70)**
Inflation	-0.032	-0.038	-0.076	-0.062	-0.072
Inflation	(2.73)**	(2.95)**	(3.32)**	(2.66)**	(3.16)**
Lagged unemployment	-0.000	0.049	-0.028	-0.051	-0.049
Lagged unemployment	(0.01)	(1.36)	(0.91)	(1.65)	(1.55)
# of ministers		-0.030	-0.032	-0.028	-0.027
# of ministers		(1.78)	(1.74)	(1.48)	(1.41)
Majority of gov.		-0.365	-0.322
Majority of gov.		(0.42)	(0.33)
Party in off (#y)		-0.006	-0.019	-0.024	-0.024
Party in off (#y)		(0.44)	(1.34)	(1.86)	(1.84)
Chief ex in off (#y)		-0.027	-0.007
Chief ex in off (#y)		(0.94)	(0.23)
% of social dem in gov.		0.009
% of social dem in gov.		(1.85)
% of christ dem in gov.		-0.008
% of christ dem in gov.		(1.74)
% of cons in gov.		-0.005
% of cons in gov.		(1.70)
Interaction: SocDem Unem		-0.001
Interaction: SocDem Unem		(2.14)*
Central Bank Independence			0.003	0.053	-0.001
Central Bank Independence			(0.01)	(0.09)	(0.00)
Schmidt Veto Index			-0.073	-0.078	-0.096
Schmidt Veto Index			(1.48)	(1.64)	(1.96)*
Trade Openness				0.001	0.001
Trade Openness				(0.30)	(0.41)
EU member after 1992				0.533
EU member after 1992				(2.43)*
Later Member of Eurozone					0.431
Later Member of Eurozone					(1.73)
Constant	-0.868	-0.040	0.670	0.299	0.452
Constant	(3.93)**	(0.06)	(0.96)	(0.46)	(0.69)
Observations	418	416	362	362	362
Number of Countries	22	22	20	20	20

Absolute value of z statistics in parentheses

* significant at 5%; ** significant at 1%

Table II: Pooled time-series analysis, dependent variable: changes in gross debt level

	(1)	(2)	(3)	(4)	(5)
Dep. Var.	Change in Gross Debt Levels (percentage points (% of GDP)
Lagged gross debt	-0.059	-0.051	-0.031	-0.008	-0.009
Lagged gross debt	(5.08)**	(4.57)**	(2.58)**	(0.77)	(0.85)
GDP growth	-1.202	-1.148	-1.287	-1.317	-1.302
GDP growth	(12.85)**	(12.19)**	(11.38)**	(11.76)**	(11.55)**
Inflation	0.009	0.019	-0.004	-0.043	-0.008
Inflation	(0.27)	(0.58)	(0.06)	(0.68)	(0.12)
Lagged unemployment	0.493	0.337	0.382	0.387	0.380
Lagged unemployment	(5.64)**	(3.16)**	(4.15)**	(4.54)**	(4.36)**
# of ministers		0.093	0.109	0.027	0.019
# of ministers		(1.60)	(1.72)	(0.47)	(0.33)
Majority of gov.		-5.216	-5.653
Majority of gov.		(2.15)*	(2.12)*
Party in off (#y)		-0.013	-0.008	0.008	0.007
Party in off (#y)		(0.36)	(0.21)	(0.25)	(0.19)
Chief ex in off (#y)		-0.029	-0.043
Chief ex in off (#y)		(0.40)	(0.53)
% of social dem in gov		-0.028	.
% of social dem in gov		(2.11)*
% of christ dem in gov.		0.034
% of christ dem in gov.		(2.51)*
% of cons in gov		0.003
% of cons in gov		(0.30)
Interaction: SocDem Unem		0.002
Interaction: SocDem Unem		(1.29)
Central Bank Independence			-4.011	-3.797	-3.523
Central Bank Independence			(2.03)*	(2.26)*	(2.06)*
Schmidt Veto Index			0.343	0.253	0.324
Schmidt Veto Index			(1.96)	(1.79)	(2.24)*
Trade Openness				-0.020	-0.021
Trade Openness				(1.93)	(2.05)*
EU member after 1992				-2.070	.
EU member after 1992				(3.65)**
Later Member of Eurozone					-1.8260.431
Later Member of Eurozone					(2.84)**
Constant	4.346	6.129	5.328	4.457	3.994
Constant	(4.81)**	(3.18)**	(2.25)*	(2.31)*	(2.03)*
Observations	399	397	343	343	343
Number of Countries	22	22	20	20	20

Absolute value of z statistics in parentheses

*significant at 5%; ** significant at 1%

Table III

Difference in means between EU member states and non-EU countries

	1980-1991		1992-1997		1998-2002
Current Fiscal Balance	Non-EU	EU	Non-EU	EU	Non-EU	EU
	-1.85	-5.64	-2.94	-4.16	1.07	0.20
	3.79 (p>0.000)		-3.69 (p>0.069)		0.87 (p>0.348)
Change in Gross Debt Level	Non-EU	EU	Non-EU	EU	Non-EU	EU
	1.77	2.29	2.65	1.27	-0.54	-2.26
	-0.52 (p>0.315)		1.38 (p>0.169)		1.72 (p>0.067)
Gross Debt Level	Non-EU	EU	Non-EU	EU	Non-EU	EU
	45.84	63.47	63.19	75.74	60.49	67.13
	-17.62 (p>0.000)		-12.54 (p>0.009)		-6.64 (p>0.3426)

Table IV

Difference in means between EMU member states and non-EMU states

	1992-1997		1998-2002
Current Fiscal Balance	Non-EMU	EMU	Non-EMU	EMU
	-3.84	-3.54	1.14	0.00
	-0.30 (p>0.640)		1.14 (p>0.134)
Change in Gross Debt Level	Non-EMU	EMU	Non-EMU	EMU
	2.67	0.92	-1.18	-2.10
	1.75 (p>0.064)		0.91 (p>0.257)
Gross Debt Level	Non-EMU	EMU	Non-EMU	EMU
	67.50	74.37	61.58	67.49
	-6.85 (p>0.185)		-5.91 (p>0.336)

Table V

Difference in Means in EU between small and big EU countries in the 1990s

	1992-1997		1998-2002
Current Fiscal Balance	Small	Big	Small	Big
	-3.49	-5.29	0.91	-1.20
	1.80 (p>0.009)		2.11 (p>0.000)
Change in Gross Debt Level	Small	Big	Small	Big
	-0.24	3.82	-2.64	-1.51
	v-4.05 (p>0.000)		-1.13 (p>0.102)
Gross Debt Level	Small	Big	Small	Big
	76.71	74.09	62.62	76.15
	2.62 (p>0.725)		-13.53 (p>0.049)