Abstract
The current study investigates fiscal sustainability across European Union Member States over the 1995–2024 period, with a comparative focus on 1995–2019 to assess the fiscal implications of the COVID-19 pandemic and the Russia-Ukraine war. Unlike prior studies that do not distinguish between accession cohorts, end their analysis before 2019, or apply a single estimator, this study employs CCEMG and AMG estimators simultaneously across EU27, Old Member States (OMS), and New Member States (NMS), over a timeframe that uniquely captures post-pandemic and wartime fiscal dynamics, while also providing a systematic country-level sustainability classification for all EU member states. The results confirm weak fiscal sustainability across all samples, with panel-level β coefficients ranging from 0.43 (EU27) to 0.46 (OMS) and 0.50 (NMS) under CCEMG, all statistically significantly different from both 0 and 1. Comparative analysis shows that recent crises have not fundamentally altered overall sustainability patterns, though New Member States exhibit greater vulnerability to external shocks relative to OMS, consistent with structural differences in energy dependence, automatic stabilizers, and fiscal buffers. These findings highlight the need for policy reforms focused on controlling public expenditure growth, improving institutional quality, and enhancing revenue collection efficiency to ensure long-term fiscal balance, while maintaining the capacity to respond to heightened security and economic pressures.