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Abstract

The author examines the problem of national debt. He is particularly interested in countries in transition where the national debt and budget deficit are interrelated. The problems of foreign debt servicing, export reduction, import increasing, poor balance of trade are the reasons which make a country over indebted. The author examines the causes of “capital flight”. Poor management of the economy in the countries in debt which leads to foreign loans and their non-dedicated spending are also topics of interest of the author. The author indicates the reasons for debt crisis and the strategy of national debt management.

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