Fiscal Sustainability in Aging Societies: Evidence from Euro Area Countries

Fiscal sustainability remains a paramount challenge in the Euro Area (EA) countries after the sharp rise in public debt-to-GDP ratios in the aftermath of the financial crisis of 2008. Using data from 11 EA countries over the period 1980–2019, we apply panel data techniques to examine the effects of population aging on fiscal sustainability, controlling for key macroeconomic variables. Our results suggest that the discretionary fiscal policy is strongly persistent, not being consistent with long-term fiscal solvency. Moreover, our results indicate that the fiscal stance is countercyclical for the countries under study and that population aging poses a major challenge for fiscal sustainability. The findings are robust to a different grouping of countries within the sample (core and peripheral countries, relatively old and young countries, and relatively more and less indebted countries). We consider that our results may have some practical meaning for national policymakers and international organizations responsible for regional and global fiscal surveillance and might shed some light on the possible effects that population aging could have on the effort of EA countries to restore public finances on a sustainable basis.

Green controlling – concept and practice

The three-dimensionality of sustainability links the following fundamental areas: ecology, economy and society. Sustainability controlling focuses on a three-dimensional sustainability-oriented system of corporate goals, which equally includes economic, environmental and social goals. Therefore, the objective of sustainability controlling is the comprehensive support of sustainability management, namely formulating and implementing a corporate policy that comprehensively covers all three dimensions of sustainability – people, planet, and profit. One of the pillars in defining sustainability is the environmental pillar. Among the three pillars of sustainability, the environmental dimension is the one that receives constant attention from academia, organizations and policy-makers. Governments, international agreements, society and various stakeholders pressure organizations to improve their behavior towards the natural environment. Thus, authors chose to focus in the present research on green controlling. There is a variety of terms used to name “green controlling” such as environmental controlling, ecologically oriented controlling, ecological controlling, eco-controlling etc. The concept is widely spread and accepted in German-speaking countries, whereas the Anglo-American scholarly community conceptualizes “environmental management control systems” or “environmental management accounting”. The authors’ objective is first to clearly define the concept of “green controlling” and secondly, to thoroughly state the most relevant instruments of green controlling for each of the following areas of responsibility: supply area, disposal area, environment area, adaptation area and coordination area. The importance of the presented research lies in the need of both controllers and managers for a clear set of easily and efficiently applicable instruments of green controlling, in the lack of which any theoretical debate lacks on relevance.