France is famous for its wine, cheese and…unions. It is well established now that any reform considered by any government, left or right, has to be approved by unions (or, at least, not strongly opposed) in order to have a chance to be passed. Strange situation in a country where less than 8% of (...)
A widespread understanding of the 2007-2008 crisis places the origins of the crisis in a capture of global economy by the finance industry. The “occupy Wall Street” group would surely agree, as well as most of those who get their economics from the general media. And President Sarkozy in his (...)
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 (...)
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 (...)
This article appeared in The Wall Street Journal
In next year’s French presidential elections, it seems increasingly likely that voters will be asked to choose between two types of statism: statism of the left and statism of the right. Over the weekend François Hollande won the final round of (...)
European governments are under pressure to shore up the banking sector in the face of growing worries about the industry’s capital levels, access to funding and earning power in the context of global crisis. Indeed, weakened by their bad sovereign debt holdings, several banks are scrutinized by (...)
Yesterday, the US President Obama announced a new debt plan built on taxes on rich. He called for $1.5 trillion in new taxes on upper income taxpayers. His plan would end Bush-era tax cuts for top earners and would limit their deductions. This proposal is following the public debate on the (...)
The French Minister of Finance, François Baroin, concluded the G7 meeting in Marseille with a statement that an equilibrium had been found between the necessity for fiscal consolidation and the necessity to avoid a recession. What kind of equilibrium is he talking about and is this equilibrium (...)
The French bank BNP Paribas published a disclaimer to this article signed by our Director of development Nicolas Lecaussin and published in the Wall Street Journal. The paper is mentioning the difficulties of some of the French banks, including (...)
The game of representative democracy is such that we constantly have to choose, not between policies, but between programs that are best seen as baskets of policies to be implemented if the candidate supporting that program is elected. The basket that the French President, Nicolas Sarkozy, (...)
In 2009, 31.3% of the French GDP has been spent on welfare payments. Those include spending by the State-managed health care system, unemployment benefits and social benefits. The government agency in charge of those payments has tripled its deficits during the past 3 years reaching a record 28 (...)
This article first appeared in the Wall Street Journal
Markets always make good scapegoats. When they do well, they are populated by profiteers. When they do badly, they are accused of causing trouble for everyone else.The denizens of the Dow, Nasdaq, CAC and DAX floors may be speculators and (...)
The world is probably going to change after the recent downgrading by Standard&Poor’s of the US debt rating from triple A to AA+. Beyond the disturbing loss of the landmark Treasuries represented for global finance, what is important here is the awareness that even the biggest world economy (...)
After a huge transfer-loan of €110 billion last year, Greece is once again pending on EU-IMF charity in order to avoid default, or at least, to benefit from a smooth default (assuming such a thing exists). Meanwhile, the Greek economy is paralyzed and tensions grow inside Greece as well as in (...)
Portugal has undergone a huge change. There is a completely new political leadership: younger, better prepared, and much more open to the civil society. But even this “right wing” government lack the theory to understand the causes of the crisis Portugal currently faces, and thus seem unable to (...)
After being seriously blamed by Italian Minister of finances Giulio Tremont last month, Switzerland finally finds itself largely approved on its private savings policy in the recently revealed by the EU Commission report on enforcement of taxation on savings regulation. As a matter of fact, (...)
Moody’s rating agency warned on Friday on Italy’s public debt and mentioned the reviewing of Italy’s credit rating for a possible downgrade. This change, if it happens, would increase the government’s borrowing costs and have a very negative impact on public (...)
Portugal is the third EU country after Greece and Ireland to need financial bail-out in order to avoid bankruptcy of the State. How did things go so wrong and for what reason - is it only the fault of the international financial crisis, or - more probably - bad management of public finances (...)
In January 2010, the largest tax reform in Denmark in more than ten years began taking effect, shifting some DKK 30 billion (€ 4.0 billion) of tax revenue when fully implemented in 2019. Of this, more than DKK 25 billion (€ 3.4 billion) is used to lower the marginal tax on income in order to (...)
France’s government presents a project to introduce several modifications in the fiscal law; a project to be validated by the National Assembly before the symbolic date of July 14.
This article appeared in the Wall Street Journal.
In the past year, Brussels has revealed its near-obsession with fiscal convergence in Europe. As the euro zone’s debt crises roil financial markets, the EU’s leaders have made clear that the only path they see to survival is centralized budgetary (...)
On Wednesday16 March 2011 the EU Commission published a proposal to introduce a Common Consolidated Corporate Tax Base (CCCTB). A few days earlier, on Friday 11 March, the heads of state of the Euro area almost agreed on a « Pact for the Euro » to save the common currency from financial meltdown (...)
The European Commission has recently relaunched the proposal for a common system for calculating the tax base of businesses operating in the EU. According to the officials, the aim is to significantly reduce the administrative burden, compliance costs and legal uncertainties that businesses in (...)
Last year discussions for introduction of the so-called fiscal board in Bulgaria led to a project of the “Financial Stability Pact" prepared by the Ministry of Finance and presented by Simeon Djankov (see here). The pact provides for fiscal rules which cannot be bypassed by a simple majority in (...)
Because the music stopped.
As Thatcher said, “They [socialists] always run out of other people’s money”. Portugal is now a perfect study case for this golden rule, with its quadruple-crisis.
When reflecting on the causes of the current economic and financial crisis, the huge upsurge in private debt is one of the most cited reasons. Some people insist on blaming the private sector for this. According to them, the sustainability of its behavior has been clearly put into question by (...)
As we have reported here in last year’s IREF Yearbook on taxation, the German government that has been newly elected in autumn 2009 did have plans for a comprehensive tax reform. These plans included the introduction of an income tax schedule with stepwise increasing marginal tax rates, and (...)
In 2010 the public deficit in Poland reached at least 7.9% of GDP. The public debt, in turn, balanced around 55% of GDP. In order to rescue public finance, the Polish government announced end of 2010 the dismantling of the reform of pension system. In the opinion of Polish authorities, this (...)
Environmental tax reforms have a history of almost two decades and were viewed as a way to the better world the “double-dividend” theory predicted. Much “political capital” has been invested in policies leading to environmental tax reforms on European and national levels from 1992 (the year of the (...)
The current Socialist (PSOE) government in Spain has claimed in different occasions that the low fiscal pressure that Spain has experienced in 2008 and 2009, gives policy-makers a large leeway to raise taxes. Besides, this measure has been supported as necessary in order to maintain –or improve- (...)
While a resolution of the debt crisis currently facing the eurozone would be most welcome, it is not clear that the current discussion goes much beyond how to bailout member countries, and whether it should be the taxpayers of these countries, the German and French taxpayer or the holders of (...)
After the huge increase of public deficits during the past two years, the French government is claiming the beginning of a new era and promises to limit the budget deficit to 6 GDP points in 2011 (down from 7.7% in 2010). If this 1.7 GDP points reduction of deficit is reached, it will be the (...)
To denounce others to Authorities is unfortunately a frequent behavior that responds to the basest instincts of human beings: the desire for revenge, jealousy, collaboration with the ruling power.
In 2006 a major change was implemented in France regarding the income tax. Not only the top marginal rate was lowered (from 48.09% to 40.00%), but the same treatment was applied to the other rates. Also, the number of brackets was reduced from 7 to 5. As a result, whatever the level of taxable (...)
In Slovakia, the economic growth has been one of the strongest in the EU over the period 2004-2008 and it came with soaring tax revenues. This growth itself was the by-product of several important reforms, especially the tax reform. It was based on real investments, not on speculation on real (...)
Like in most European economies, public debt in Germany is characterized by a secular upward trend. There are reasons to believe that the current trend is not sustainable. The ratio of debt to GDP is expected to reach 76,5 percent this year (Deutsche Bundesbank 2010), which implies a ratio that (...)
In the context of debt crisis in the European Union, the French public debt finally attracts the attention of the government. Is the situation still under control and is there a chance for French authorities to limit the deterioration of public finances? To answer the question, Vesselina (...)
In 2009 Poland was the only country in the European Union (EU) with positive economic growth. This was a result of both good policy and favorable circumstances. In 2010 Poland is no longer the sole “green island” of growth in EU. Furthermore, the state of public finance is a growing risk factor (...)
Romanian government took recently more and more controversial measures. Many of them are officially presented as a consequence of the economic and financial global crisis. Actually, they are the consequence of ill-conceived, poorly-explained and incoherently applied fiscal reforms. We have (...)
„We reform firmly, gradually and effectively” said Poland’s Finance Minister, refuting accusations that his government is postponing important reforms to public finances until after the next parliamentary elections, expected for 2011. And yet these reforms can be summed up in only in one way: they (...)
This report offers a survey of EU energy taxation scheme and provides some insights on the possible outcomes of current EU policy in the energy domain. The authors are reviewing the existing legislation, namely the Council Directive 2003/96/EC and are analyzing the possible economic ground for (...)
Portugal has a long tradition of corporate tax evasion. Perception of high tax burden, social tolerance to fraud and evasion, high psychological fiscal pressure* , instability and insecurity of the tax codes and complex and slow fiscal system are the factors usually pointed as the ultimate (...)
2009/2010 has been a period of phoney fiscalism in the United Kingdom. The period is sandwiched between the economic crisis, which put fiscal policy onto an emergency, macro-economic footing and an election (May 6th 2010). Economic crisis has been marked in the UK as in most other countries by (...)
It’s not unusual to hear people criticise the fiscal competition states engage in, pretending that such practices lead to losses in tax revenues. In this matter, the expression “harmful fiscal competition”, which is notably retained by the European Union, is often used, though sometimes (...)
Looking for budget savings
Some analysts are suspecting that the current fragile economic recovery will be damaged by the policy of government spending cuts that many countries undertook in order to reduce their public budget deficits. The debate is perfervid, in particular in the US where (...)
This paper appeared in The Wall Street Journal.
When the economic crisis struck in 2008, the French government assured its citizens that our social model would protect and cushion us; that we would not be hit nearly as hard as other countries in the downturn.
Two years later, one can hardly (...)
The economic crisis is far from having created only victims. In France and all abroad, government employees didn’t suffer from the recession at all.
The last data from Eurostat are evidencing that during the crisis the share of government payments for salaries became a bigger part of government (...)
Following the last visit to Paris of the German Minister of Finances Wolfgang Schäuble, the French and German governments have decided to harmonize their tax systems. Both sides have emphasised the positive impact that such a harmonization could have on the economic growth in Europe and on the (...)
The French Minister of Economy, Christine Lagarde, recently announced that the government will stimulate the housing market in an attempt to boost the economy. “Building and construction industry is a key sector, with important multiplier effect on the whole economy”, says Lagarde, “Our aim is to (...)
It is summertime and everyone is happy to take a brake from what has been a terribly tormented spring. Many of our European politicians and policy advisers (IMF) feel satisfied—or at least claim to be—that they have done the right thing and kept the boat afloat. Now, they say, we just have to (...)0 | 50 | 100 | 150 | 200 | 250 | 300 | 350 | 400