Category - Aimé Philombe ZAPJI YMELE

The rapid growth of public debt in the 1980s gave rise to a new expression. The snowball effect in question, refers to the automatic swelling of the debt by its interest charges, or the self-sustaining process of public debt by the interest owed on it. The primary surplus is the alternative that will reduce the debt and, by the same token, the snowball effect. In response to the ever-increasing debt levels and budget deficits of European countries, the Maastricht criteria were proposed in 1992. In order for European states to converge, a debt threshold of 60% of GDP and a maximum budget deficit of 3% of GDP were set. We are entitled to analyse the relevance of these criteria to determine whether they will prevent a snowball effect. (Bohn's 1998) model serves as a guide in this context. Analyzing panel data on 33 OECD countries using the OLS method, it shows that the primary surplus/deficit is improved when the debt ratio is below 60% of GDP, which makes it possible to reduce interest...