Until now, the debt crisis seemed to spare the biggest European economy. But the country everybody is relying on starts to meet difficulties to refund its debt. The sale of German benchmark bonds on Wednesday turned to a disaster and the Bundesbank has been forced to hold on to record amounts (39% of the €6 billion Germany had hoped to sell) to ensure the auction did not fail. However, this is not so surprising if one takes a look on German 10-year real bond yield that turns to be negative:
2011
French richest woman Liliane Bettencourt has been caught up by the fiscal authorities for tax avoidance. Mrs Bettencourt, they reveal, has an offshore bank accounts and acquired hiddenly an island…
This is the annual cost of one percentage point increase of the interest rates on French government bonds, according to the credit rating agency Moody’s. France is currently facing 2%…
A comprehensive test of yardstick competition exploiting an italian natural experiment
Do fiscal decisions of incumbent mayors affect their probability of being re-elected? Do they consider the fiscal decisions of the neighboring mayors when they face an election? And do these…
Concern over future tax rates is one of the main reasons for reduced investor confidence
A must-read piece by Alan Meltzer in The Wall Street Journal explains why the economic response to increased government spending is so different from the response predicted by Keynesian models.…
Germany has raised over a quarter of its total EFSF obligation of €211 billion by way of what is essentially magic. The Telegraph reports that “Germany is €55bn richer than…
The sovereign debt crisis forces our governments to stretch their imagination in order to find additional budget revenues. In Europe, as well as in the US, many voices call for additional contributions from the rich (not such a big stretch of imagination, in fact, if it was for the already high contribution asked from them). Interestingly, some eminent wealthy people like Warren Buffet in the US or Liliane Bettencourt (L’Oréal) in France welcome the idea, denouncing a system that deprives them from the possibility of making an equitable tax contribution (read more about this here).
William A. Niskanen, chairman emeritus and a distinguished senior economist at the Cato Institute, has died at the age of 78. Niskanen was the chairman of the Cato Institute for…
The Coalition for Tax Competition asked members of the US Congress to cut the $100 million taxpayer subsidy to the Organization for Economic Cooperation and Development. Citing the OECD’s record as an opponent of tax competition, the letter released by the coaltion argues that US taxpayers should not be funding an organization which works against their interests by promoting a statist agenda.
French austerity measures – more taxes and unconvincing plans to balance the budget
For the French government, it is more than ever urgent to convince everyone that the State deficit is moving in the right direction and the public debt is sustainable. In the context of an uncertain future for the French credit rating triple A note, the present debate on the budget of the State for the coming year and the austerity measures it includes became a really hot issue. The initial project of budget for 2012 has been already adopted by the Financial Commission at the French National Assembly and is now being discussed by the deputies.