Term Structure of Public Debt and Refinancing Risk in the Economic and Monetary Union

As public debt is an important factor influencing most countries' economies, the debt management seems to be crucial for the economy. Risk identification and minimizing is considered to be the most important aim of the debt management process, especially during economic slowdowns or crises. The main goal of the article is to assess the term structure and the level of refinancing risk in the in the Economic and Monetary Union (EMU) as a whole and in chosen EMU member states in particular. Refinancing risk is affected by the term structure of public debt. To monitor the level of this type of risk, not only the original maturity should be taken into account, but the residual maturity as well. Since the beginning of changes on the markets caused by the crisis, the volume of short-term public liabilities in the EMU countries has increased significantly, as well as the value of "debt to GDP" ratio. This could contribute to the overall increase in the level of refinancing risk. High share of short-term instruments in the structure of public debt in some EMU member states can cause problems with liquidity and solvency of their budgets. However, as an average, long-term instruments were mostly used to cover the financial needs of public sector in the EMU.