Public spending

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…

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.

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

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.

This is the amount of increase of the French public debt from 2008 to 2009. It represents 10 GDP points. While making a lot of noise about the 22 billion…

„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.

This is the estimation of lost output for every dollar of government spending that made the University of Chicago’s professor Harald Uhlig in a paper published by the American Economic…

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 the government has opted for the keynesian policy of massive public spending. The effects of this policy, as was to be expected, have been so far calamitous and the American deficit is not about to be absorbed. Furthermore, tax reductions introduced by Bush in 2005 will expire next December and, most probably, will not be extended. An additional fiscal burden will therefore hit an already suffering economy.

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 spending. Thus, government employees have actually seen their revenues increase.