Online Articles

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 the debts of these countries, mainly German and French banks. Even if it is decided which solution to take, the underlying problem that caused the crisis in the first place remains. This is the one-size-fits-all eurozone monetary policy.

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 first time in 50 years that such an effort to restrict public spending ends with success. But will the government reached the target this time?

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…

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 estate markets or inflated construction sector. After the 2008 crisis, the relatively low Slovak debt of 35.4% GDP does not attract as much attention as countries around the Mediterranean Sea or Ireland.

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 is more than doubled since 1980. Looking at the time-series since the mid-1970s (e.g. Sachverständigenrat 2009, p. 373), one can infer that the responsibility for this long-term increase falls both to the federal and state governments, with the impact of the former being about three times as large as the impact of the latter. One can also infer that, after the Keynesian fiscal policy experiments in the 1970s, the debt-to-GDP ratio stagnated for much of the 1980s, and increased again in the early 1990s following the German re-unification. Following periods of stagnation are then punctuated by the end of the internet bubble at the beginning of the last decade, and by the recession following the most recent financial crisis.

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…

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 for sustainable economic growth. Although there is some progress in implementation of structural reforms (as opposed to time wasted in 2005-2007), in our opinion fiscal challenges are still not addressed sufficiently.

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 presented elsewhere some of the problems faced by Romania during its transition (see the reports for Romania in IREF’s yearbooks on taxtion). We will here limit ourselves to problems related to current budgetary difficulties. In short, Romania’s deficit is the result of many errors on the expenditure side as well as on the revenues side of its consolidated budget. Similar errors are still made today.

„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 are poor.