Companies & Regulation

It is often rightly pointed out that the EU has (so far) no power to tax. True. But it has the power to regulate and uses it! If both, taxation and regulation have a profound impact on companies’ and, if only indirectly, on consumers’ decisions, taxation attracts more public attention largely because data on taxation are more readily available. As a consequence, the impact of EU and member states regulations on our economies tends to be underestimated. How can we correct for this? A look at the work done in the US by the Competitive Enterprise Institute, will provide some inspiration.

The French government is considering the possibility to force companies that have paid higher dividends to their shareholders in 2010 and have more than 50 employees to pay a €…

No, this is not science fiction, but recent statistics from the most respectable Eurostat. With the exception of Cyprus and Luxembourg, France is the European country with the lowest value added by the industrial sector – 12.4% of GDP in 2009. To compare, the EU27 average is 18% of GDP and the number for Greece is reaching 13.3%, while some of the EU leading economies, like Germany, are scoring up at 22.2%. It is also interesting to notice the paradox that Germany is accounting for approximately the same number of enterprises per capita as France…

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 the recent events. But, what lies behind this exorbitant private indebtedness? This article is focusing on the Spanish case, with some references to the United States.

For the first time since 2002, the credit rating of Japan has been downgraded to AA-. By doing this, the Standard and Poor’s rating agency has placed Japan on the…

According to various Internet sources, Irish banks would have borrowed €51bn from the Irish central bank by the end of December, under an obscure program listed in the balance sheet as “other assets”. That is, the Central bank has electronically printed up new currency units for Irish commercial banks, without issuing debt behind these actions. The actions of the Irish central bank are not ignored by Germany, but fall out of the area of official monetary policy and appear to involve money creation outside the normal control of the European Central Bank.

According to the 2011 Index of Economic Freedom released by the Heritage Foundation and The Wall Street Journal, European nations continue to enjoy a great degree of economic freedom. But while three of the 10 freest economies in the world are European, only one – Switzerland, at No.5 – is rated as truly “free.”

While governments are tempted to raise taxes on capital gain in order to reduce their public deficits, the study realized by the London based Adam Smith Institute explains why the temptation should be resisted. Based on clear economic reasoning and on evidence from the US, Australia and Canada, they show that there is a Laffer curve effect at work; one that is probably stronger than in the case of personal income tax. In other words: higher capital gains tax rates are very likely to give lower tax revenues.

Philipp Bagus, a young Spanish scholar and one of the prize winners of the IREF Essay Contest, recently published a very interesting book on the European monetary system. Using the…

This is the cumulated budget deficit of the OECD countries in 2010. On average, it represents 7.5 GDP points.