Abstract:

Extraordinary situations, such as the financial crisis, economic crisis or pandemic, lead to a decline in GDP, an increase in inflation, an increase in general government debt and an increase in general government deficit in many countries.

The article 126 of the Treaty on the Functioning of the European Union contains a criterion concerning the general government deficit and the general government debt that must be met by the Member States of the European Union. The relation between the deficit/GDP and debt/GDP ratios and the reference values established for them is significant. The reference values are constant and they are equal  3% for the deficit/GDP ratio and 60% for the debt/GDP ratio.