WP 2017-01. Executive Summary
Since the financial crisis, government debt ratios have increased in many countries. Most studies indicate that there is a negative association between high medium- and long-term debt ratios and growth, although the exact magnitude of the relationship is being (...)
Has the European Court of Justice interrupted a honeymoon between Gazprom and the EU?
The energy giant Gazprom has been investigated by the EU Commission over an alleged abuse of dominant position and anticompetitive practices. At the end of 2016, Gazprom submitted a proposal with changes to (...)
The creation of a European Digital Single Market is moving forward, but the risk of regulatory capture is significant and it is undermining the success of the project.
The reduction of roaming costs Consistent with the EU strategy of creating a Digital Single Market, the abolition of (...)
The Italian Prime Minister, Matteo Renzi, has recently announced the intention of the government to invest 13 billion euros to help modernizing Italian manufacturing. Leaving aside reasonable doubts regarding how the government will manage to raise these funds, it appears evident that Mr Renzi (...)
The EU Commission’s investigation
After a three-year investigation, on the 30th of August 2016 the European Commission has concluded that Ireland should recover up to €13bn (£11bn) from Apple. The Commissioner, Margrethe Vestager, said that Ireland allowed Apple to pay substantially less than (...)
Commercial property sector in UK after the Brexit referendum The UK’s choice to leave the EU triggered great instability on the financial markets resulting in currency value shocks and asset volatility while both businesses and consumers’ confidence fell sharply. Commercial property has been amid (...)
In May 2016, the Ministry for Universities and Science of the UK Government published the white paper “Success as a knowledge-economy”. The explicit intention of the document is to indicate a path of reform for higher education in the country. The proposal argues in favour of a series of (...)
On the 5th of July, just a few days after the UK expressed its intention to regain trade negotiation autonomy with the Brexit referendum, the EU has found itself in a pivotal position. It had to take an important decision regarding the nature of the Comprehensive Economic and (...)
Something is rotten in Italy, namely Italian bank loans amounting to € 360 billion. For around one out of five loans payback is doubtful. Such an imbalance in the Italian banking sector is a reminder of the financial crisis in 2008. In response to the crisis the European Single Resolution (...)
Some figures on the sharing economy
The sharing economy is a market system that requires peer-to-peer-based sharing of access to goods and services. The sharing is possible thanks to the use of digital platforms that allow peer-to peer transactions. The phenomenon (gross revenues were (...)
On Monday the 6th of June 2016 an IREF workshop in cooperation with St. Mary’s University took place in London. International academic presenters gave talks on their recent research articles, providing stimulating and interesting insights on issues that are at the centre of the IREF proposals. (...)
The BBC Charter
The British Broadcasting Corporation, BBC, is the oldest and largest broadcasting corporation in the world. It is funded (partially) by annual licence fees charged to all households possessing any type of equipment to receive TV broadcasts. BBC shows, documentaries and TV (...)
In less than a month, UK voters will be asked to express their intention to leave the EU in a referendum. The UK Prime Minister David Cameroon has strongly argued in favour of staying. However there is disagreement among Conservative MPs, and a few Ministers of his Government have spoken in (...)
2016 is going to be a crucial year for Royal Mail, RM, the 500 year old British postal operator whose privatization process (started in October 2013) was finally completed in October 2015. In a broad sense, it is a decisive time for the entire sector of delivery services in Great Britain. The (...)
Addictive Manufacturing (AM) is the name adopted in industries whose production is defined by the use of large scale 3D printing techniques. 3D printing is a technology which builds three-dimensional objects from a digital prototype. Today AM represents the foremost level of digitalisation in (...)
The Nobel-Laureate Douglass North passed away at the end of November. Though he didn’t specialise in fiscal questions, his analysis of institutions in early modern Europe reveals that actual fiscal choices about how to finance an army help to determine the fortunes and falls of European powers. (...)
A successful integration of asylum migrants arriving in Europe will largely depend on their success on the European labour arket. In a new Policy Paper we investigate the labour market barriers faced by asylum migrants in Germany, France and the UK. We recommend a full elimination of barriers (...)
In an alarming trend, individuals, companies and institutions that have committed no crime are increasingly finding themselves subject to public witch-hunts on ill-defined ‘ethics’ charges. The practice is gaining traction in several countries, though it remains unclear who has the authority to (...)
An essential component of a free society is independent press. It plays a central role in preventing both state actors and private interest groups from pursuing their own interests through state power too aggressively. Journalists independent from political and economic power work effectively (...)
Each employed Slovak worker will pay about a week’s take-home pay in extra taxes so that their government can bribe Jaguar into creating a few jobs located in Slovakia (for a while). We present lessons this teaches us, one for each day of such (...)
Economists are often accused (especially by other disciplines) of exaggerating the virtues of the market and of systematically downplaying the chances of a successful government intervention. In this view, economists are "market believers" and “state sceptics”, which is then reflected not only in (...)
Earlier this week, Russian borrowers with Euro or Dollar mortgages called upon Putin to relieve them of their now increased interest payments. Banks should bear the costs, whilst the borrowers bore the benefits until now. We show that this bailout is just a repeated story of bank and government (...)
According to several reports, EU Commission President Jean-Claude Juncker is planning to introduce a 300 billion-euro investment package this Wednesday (November 26th). The idea is to establish a European fund that will assume liability risks on behalf of private investors. Only profitable (...)
The new Nobel Memorial Laureate is one of prime architects of modern regulation of markets. To many that will make him a social engineer. However, as modern EU governments’ budgets are increasingly suffering from similar problems of failed previous regulation and self-regulation, his voice (...)
A famous economist, author of even more famous economics textbooks, is calling for an end to corporate taxation. Not because he has been bought by the corporate world and multinational companies, but because it makes economic sense. Perhaps most surprisingly – it should make sense even to (...)
After many Occidental countries imposed sanctions on some Russian businesses, Russia has retaliated by restrictions on some Occidental ones. Trade wars rarely work. However, a new fiscal phenomenon has appeared: affected EU companies seek compensation from the state for loss of markets. Should (...)
Confidence in the ECB wobbles as commentators on all sides question the effectiveness of supposedly growth stimulating new policies.
Markets and Investment
At least two big takeover deals are being negotiated in Europe now, both with heavy government involvement. The (...)
The concept of Living wage is gaining popularity throughout the EU. The social pressure of its advocates probably stands behind the recent proposals to increase substantial minimum wages. Closer scrutiny of the proposed levels of living wages by the IREF reveals, however, that the relationship (...)
If the Yes campaign wins today, Switzerland will have by far the biggest minimum wage on this planet. We analyse this trend in a wider context of contemporary European popular movements. We suggest that the Swiss Minimum wage proposition has actually very little to do with the traditional (...)
Three fundamental questions have emerged, but clear answers still have not:
Free floating for the hryvnia?
New bureaucrats in Brussels?
New rules for high-frequency trading?
The latest Scorsese blockbuster is still making the headlines for its novel artistic work with timelines. Does the Wolf, however, have anything whatsoever to say about Wall Street? Very little, and it may actually work to strengthen and entrench any bad practices that remain in the financial (...)
In his new book Capital in the 21st century (Belknap Press, April 2014), French economist Thomas Piketty presents a mass of data on asset growth in several European countries and the United States. This information improves the knowledge of our society’s relationship to capital and the divide (...)
European growth stutters along as fear of deflation exerts pressure on the ECB to loosen monetary policy further.
It is not forbidden to former socialist countries to reduce the weight of the state and drastically reduce taxes, especially on businesses. This was done in Sweden and Denmark, where unemployment is lower than in France .
Here is a relevant remarks from Professor Florin Aftalion: the word "profit" has disappeared from the public debate to be replaced by the word "margin". This semantic shift is not trivial: the profit goes to CEOs and shareholders while the margin is under Government (...)
A little more than 30 years ago, George Gilder published a book titled: “Wealth and Poverty”. This book became a worldwide bestseller. As a researcher, an economist and an investor, the author showed that government intervention cannot reduce poverty, but economic growth and economic development (...)
GDP in the EU area seems to be growing, but at a very slow pace. Although financial market remain sanguine, the real estate sector presents a mixed picture, with bad news coming from heavily indebted countries. While waiting for better news, the authorities are devoting their attention to the (...)
And in France, there is a high level of unemployment whereas it is low elsewhere. And elsewhere, there is no Labor Code, no unions, no judges, and everybody is satisfied with the freedom of work, as reported by IREF European (...)
This is the transaltion of an article published by Nicolas Lecaussin on August 14th, 2013
What is the common point between Socialists as Claude Bartolone, President of the French National Assembly, Pierre Moscovici, the Finance Minister, MP Jérôme Guedj, Conservatives as Xavier Bertrand, Health (...)
This little county on the shores of the Baltic Sea will become the 18th member of the Eurozone. That is well deserved since Latvia meets all of the Maastricht criteria. Its public debt amount to 40% of its GDP compare to 70% in Germany and 90% in the Eurozone. The maximum public debt rate (...)
Fortune has ranked the 50 most admired companies worldwide. Of course, Apple, Google, Amazon and Coca Cola are above all others. Among non-US companies can be found two German companies (BMW and Volkswagen), one Swiss (Nestlé), one from South Korea (Samsung) and one Irish (Accenture). But none (...)
The French Government supporting private companies thanks a system of financial assistance: what an economic heresy! Yet, over the last thirty years, it has become the creed for French Governments, whether conservative of leftist. Four figures are to be pointed (...)
Why would you stay in a country where there are more than 200 types of taxes? And in which taxes are piled up and never removed. If French President François Hollande and his government want to fight against tax havens, French taxpayers and entrepreneurs are battling against the daily tax hell (...)
Since events related to financial, banking, and debt crises regularly make it into the news, a term that seemingly originated from the Bank for International Settlements (BIS) in the late 1970s has become more popular: macroprudential supervision. Whereas microprudential supervision relates to (...)
In a recent post, Nicolas Lecaussin is pointing out that tax consequences can be studied as in a lab: some American States can be observed. Taxes were lowered in thirty States. If they gather only 20% of the US population, they have created 65% of US (...)
Germany and Finance Minister Wolfgand Schäuble do not press for setting up a banking union and rejects a centralized authority whereas France and Finance Minister Pierre Moscovici are urging to set up the banking union through centralization. The latter position is also the Commission’s. The (...)
Big Governments usually do not trust people or companies to improve living conditions. That is why notions of “social justice”, “solidarity”, “equality” and above all “sharing” were hijacked by Governments and turned into an economic principle: redistribution. Since it is believed the Government is the (...)
Knowledge has now become a capital investment and no longer a cost of producing goods. This change has been announced by Brent Moulton, head of national accounts at the Bureau of Economic Analysis (BEA), on April 22nd, 2013. This will change the way gross domestic products are calculated. It (...)
The new IREF paper of Stefan Lutz, from the University of Manchester, UK, and the Universidad Complutense de Madrid, Spain, points out that if it is apparent that companies do not welcome taxation, the main reason is that taxes reduce profits: shareholders are disappointed and the prospects for (...)
France is the best example of this economic truth. The French public sector is undermining the economy. It must be pointed out that in Spain and Ireland the crisis was due to a real-estate bubble. In France, the crisis is worsened by an obese bureaucracy. The trend is striking: the French (...)
Here is a new and big campaign against tax havens. But tax exile will last as long as confiscatory and arbitrary taxes will last. It is the case in France. Should not a tax amnesty be proposed? The IREF is making the proposal that all sorting out that has begun this year should reach an (...)
Bumpy springtime for the ECB: no recovery, another major blunder and more regulation. Times ahead are becoming increasingly hard as more EU countries are in trouble, new regulations are being introduced and banking and sovereign borrowing are (...)
“She did not just lead our country; she saved our country” said British Conservative Prime Minister David Cameron as a tribute Margaret Thatcher who died at 87, on April 8th, 2013. Tony Blair, former British Labor Prime Minister, declared: “Very few leaders get to change not only the political (...)
WP2013-01. Executive Summary
This working paper explores the notion of personal responsibility by considering people’s attitude towards redistribution. In particular, the authors run a controlled experiment by offering a representative group of people the possibility of choosing a (...)
This is an unexpected outcome of the Cypriot “bail out – bail in”. The fact that the Cypriot Government is now able to control money transfers and cash withdrawals is a threat for the European market. Can it still be called a free market if restrictions are applied on the ability to move money? (...)
The Cypriot crisis has enthroned Germany has the leading European country. European economics are likely to be German driven from now on. Thus, fiscal profligacy or faulty business models are considered to have caused the recent crisis and the German cure to this is clear: austerity and (...)
6 lines against 20! In Germany, the gross salary is taxed by only few contributions (tax on salaries, solidarity, pension fee, Church). It was understood that flexibility is much more efficient with a fiscal and regulatory simplification.
In France, it is the exact opposite. The French pay (...)
This 3rd newsletter, written by Kevin Dowd and Gordon Kerr with Enrico Colombatto, is pointing out the auterity consensus tested as the Irish liquidation of Irish Bank Resolution Company, anayzing also further Collapses, Poor Results and Regulatory Arbitrage in (...)
Gilles Hennesy, an LVMH director who is executive vice-president of commercial at Moët Hennesy, and Christophe Navarre, chief executive of Moët Hennesy, are both moving to London. Bernard Charlès, chief executive of Dassault Systèmes, declared that some Dassault’s top managers already from France to (...)
The European Union is about to bail out Cyprus but no details on how it could be done are released yet. Joerg Asmussen, ECB board member, announced that “the troika of European Union, International Monetary Fund and the European Central Bank would send a mission of experts to Cyprus on Tuesday (...)
The “Personal Professional Training Account” is one of the most interesting measures taken in the reform of the professional training sector announced by President François Hollande on March 4th in Blois, France. It is the first time that the “voucher principle” would be applied for the use of (...)
Are there as many foreign investments in France as Arnaud Montebourg claimed in his letter to Maurice Taylor? In his article, Lucas Léger, IREF researcher, analyzed statistical data and concluded that Montebourg was wrong. The truth is that, compared to the United Kingdom and Germany, France is (...)
In a recent article, Lucas Léger, an IREF associate researcher, pointed out that even if the research is a French Government priority, entrepreneurship and innovation are not supported and the basic research would better off without Government (...)
The IREF’s aim is to defend and promote economic freedom and fiscal competition. Our aim goes against the OECD’s last study that was commissioned by the G20 and called “Addressing Base Erosion and Profit Shifting”. It will be presented on February 15th at the G20 Summit in Moscow. The OECD claims (...)
Prof. Enrico Colombatto (Turin), IREF scientific director, has provided his update on EU policies. This month, he describes sovereign bailouts, the probable change of monetary policies, and the repayment of ECB loans.
Domestic. How are the high profile struggling countries faring – Greece, (...)
The Swedish education market is one of the freest of the world. As such, it is one of the most interesting to study. Authored by Jacob Arfwedson, the IREF report “Vouchers and Free Schools: the Swedish Experience” provides striking insights into the dynamics of a budding free market in (...)
Commentators often tend to link immigration to social problems and high unemployment. But as shown by the Swedish Reform Institute in a comprehensive study published in January 2013, this is not the case, on the contrary.
By Jacob Arfwedson
For global capitalism to reach optimal eclosion, there are several basic conditions:
> free trade: companies are allowed to sell wherever they sense a profitable opportunity;
> the tech revolution: production may take place anywhere, whereas selling may be done thousands (...)
By Alexandre Diehl, Lawyer and IREF research Fellow
For the past few weeks, and as Google has announced “bad” results on the financial markets, the media are gurgling with strange and technical news on a possible tax audit for the company. What is going on? Has Google broken the law, or are the (...)
IREF has asked its scientific director, prof. Enrico Colombatto (Turin) to provide a periodic update on EU regulations. Policies adopted by Brussels in 2012 did not help to surmount the crisis: what will happen in 2013?
A petition was submitted by French MPs to the Constitutional Council regarding the limitation on the wealth tax and the new regulations which were to take into account "virtual" incomes.
On 28 November 2012, IREF and the French Taxpayers Association addressed an argumentary (see attachment in (...)
Important determinants of multinational firms’ choice of location include, besides resource cost and infrastructure, the taxation regime through its effects on international pricing and profits. This paper investigates the effects of tax rates on firms’ profits and financing decisions by (...)
By Jean-Philippe Delsol
The fiscal frenzy which has seized the French socialists not only means that the economy grinds to a halt. It is attacking the very foundations of society by destroying entrepreneurship and responsibility. Taxes are raining on the people and the promised shelters (...)
This paper provides both a theoretical framework and an experimental test to analyze how individual responsibility affects social preferences for redistribution in settings where individuals are differentially subjected to the probability of a productivity shock. Our results confirm the (...)
The founder of the Adam Smith Institute, Dr. Madsen Pirie, visited IREF on Thursday 15 November to present his book Think Tank: The Story of the Adam Smith Institute (Biteback Publishing, 2012)
After discussing the specificity of the think tank as an independent influence on policy, and the (...)
At his press conference on Tuesday 13 November, François Hollande declared that, “Returning to a balanced budget essentially means looking to spending cuts rather than tax increases. Are we better off with 57 per cent of GDP of public spending, whereas it was 52 per cent five years ago?” He is (...)
Tax lawyer, deputy director of IREF
The government’s goal of reducing the budgetary deficit to 3 per cent of GDP is commendable, even though such a deficit will inevitably increase the French public debt as growth will be low or even close to zero. However, the tools (...)
Despite being bombed by information, it seems we have forgotten the roots of the debt crisis. Instead we play a martingale game, where the only precaution after losing a round is to double the bet for the next one. The solution is not called EFSM, EFSF, ESM, SMP, OMT or banking union. These are (...)
An old American joke has it that hell is where the Swedes are in charge of entertainment. But the last laugh in fiscal policy matters in Europe will probably go to Swedish legislators as they vote for implementing a reduction of corporate income taxes (...)
The Taxpayers’ Alliance has published a summary of its final report, proposing a Single Income Tax to tax streams of income once. As stated by Allister Heath, Chairman of the TPA Tax Commission, "the old order is broken and needs radical reform. But we are also realists: our proposals, while (...)