The external vulnerability became an important issue as a result of recent financial crises. The debates focused on the external and public debt sustainability in order to identify the relationship between these two variables in order to investigate the degree of vulnerability of a country from the point of view of its international financial position and internal stability. So, the recent increase of external debt in Romania conduct to the necessity to analyze the debt sustainability for the external position and for the domestic debt. The aim of this paper is to investigate the relationship between public and external debt sustainability in Romania. Using monthly data from 1992 to 2007 we find evidence for weak form of Romanian debt sustainability.

public debt, external debt, sustainability