The differentiation of the direct taxes among the old and the new EUmember states is analyzed in order to discuss the options for further coordination of the corporate taxation. As the existing fiscal barriers among the EU states have become a substantial barrier to the internal trade in theEU further steps to tax harmonization are revealed as a medium term options.
Volume 57, Issue 7 -8
The challenges of cyclical adjustment and fiscal consolidation sustainability in the new EU member states areanalyzed by comparative study of their own experience and that of the EMU member states. Different types offiscal policies are analyzed quot; reflationary, deflationary and supply side oriented policies. Conclusions are drawn for the main trends in the EU governance reform and the fiscal sustainability of the EMUmember states and the new EU member states.
The abstracts and papers on this website reflect the views and opinions of the author s. In April in Brussels , European Commission President Jean-Claude Juncker suggested that the eurozone should be represented at the IMF as a bloc, rather than each member state separately: "It is absurd for those 15 countries not to agree to have a single representation at the IMF. It makes us look absolutely ridiculous. We are regarded as buffoons on the international scene".
Leading EU figures including the Commission and national governments have proposed a variety of reforms to the eurozone's architecture; notably the creation of a Finance Minister, a larger eurozone budget, and reform of the current bailout mechanisms into either a "European Monetary Fund" or a eurozone Treasury.
While many have similar themes, details vary greatly. The values for EU members that are not also eurozone members are listed both separately and as part of the EU. Interest rates for the eurozone, set by the ECB since Levels are in percentages per annum. Between June and October , the main refinancing operations were variable rate tenders, as opposed to fixed rate tenders. The figures indicated in the table from to refer to the minimum interest rate at which counterparties may place their bids.
The following table states the ratio of public debt to GDP in percent for eurozone countries given by EuroStat. The primary means for fiscal coordination within the EU lies in the Broad Economic Policy Guidelines which are written for every member state, but with particular reference to the 19 current members of the eurozone.
These guidelines are not binding, but are intended to represent policy coordination among the EU member states, so as to take into account the linked structures of their economies. For their mutual assurance and stability of the currency, members of the eurozone have to respect the Stability and Growth Pact , which sets agreed limits on deficits and national debt , with associated sanctions for deviation. In , Portugal, Germany, and France had all exceeded this amount, but the Council of Ministers had not voted to fine those states.
Subsequently, reforms were adopted to provide more flexibility and ensure that the deficit criteria took into account the economic conditions of the member states, and additional factors. The treaty entered into force on 1 January for the 16 states which completed ratification prior of this date. Olivier Blanchard suggests that a fiscal union in the EZ can mitigate devastating effects of the single currency on the EZ peripheral countries. But he adds that the currency bloc will not work perfectly even if a fiscal transfer system is built, because, he argues, the fundamental issue about competitiveness adjustment is not tackled.
The problem is, since the EZ peripheral countries do not have their own currencies, they are forced to adjust their economies by decreasing their wages instead of devaluation. The financial crisis of —08 prompted a number of reforms in the eurozone. One was a U-turn on the eurozone's bailout policy that led to the creation of a specific fund to assist eurozone states in trouble.
In February , the UK secured further confirmation that countries that do not use the Euro would not be required to contribute to bailouts for Eurozone countries. In June , a broad agreement was finally reached on a controversial proposal for member states to peer review each other's budgets prior to their presentation to national parliaments. Although showing the entire budget to each other was opposed by Germany, Sweden and the UK, each government would present to their peers and the Commission their estimates for growth, inflation, revenue and expenditure levels six months before they go to national parliaments.
Poland has criticised the idea of withholding regional funding for those who break the deficit limits, as that would only impact the poorer states. Nobel prize-winning economist James Tobin thought that the euro project would not succeed without making drastic changes to European institutions, pointing out the difference between the US and the eurozone. As the price level of the currency bloc is kept low, the unemployment level of the region has become higher than that of US since When it comes to fiscal policies, 12 percent of the US federal budget is used for transfers to states and local governments.
Also, when a state has financial or economic difficulties, a fair amount of money is automatically transferred to the state. The US government does not impose restrictions on state budget policies. This is different from the fiscal policies of the eurozone, where Treaty of Maastricht requires each eurozone member country to run its budget deficit smaller than 3 percent of its GDP. In February , a study from the Centre for European Policy concluded that while some countries had gained from adopting the euro, several countries were poorer than they would have been had they not adopted it, with France and Italy being particularly affected.
The authors argued that this was down to its effect on competitiveness; usually countries would devalue their currencies to make their exports cheaper on the world market but this was not possible due to the common currency. Baring suspected the possibility that the people in Mediterranean countries would regard Germans and the currency bloc as economic policemen. From Wikipedia, the free encyclopedia. Area in which the euro is the official currency. San Marino.
Eurozone members. Monetary agreement.
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Introduction of the euro in the EU member states already using the euro
Foreign Relations. High Representative. Foreign relations of EU Member States. Other countries Atlas. Further information: International status and usage of the euro. Further information: History of the euro.
Main article: Enlargement of the eurozone. Main article: Withdrawal from the Eurozone. See also: Greek withdrawal from the eurozone. See also: European Fiscal Compact. See also: Euro Plus Pact. See also: Phillips curve and Nominal rigidity. European Union portal. However the euro does circulate widely. However the euro is also accepted and circulates widely. It uses the Aruban florin , which is pegged to the US dollar. Archived from the original on 7 April Retrieved 16 May CS1 maint: archived copy as title link both are pegged to the US dollar.
The Republic of Kosovo unilaterally declared independence on 17 February , but Serbia continues to claim it as part of its own sovereign territory. The two governments began to normalise relations in , as part of the Brussels Agreement. Kosovo has been recognized as an independent state by out of United Nations member states , while 12 states have recognized Kosovo only to later withdraw their recognition.
Euro area 19 countries ". Interinstitutional style guide. Retrieved 2 February Retrieved 10 September Retrieved 18 June European Communities. Retrieved 12 September Andorra Mint. Archived from the original on 22 August Retrieved 26 March Archived from the original on 4 October Europa web portal. Retrieved 26 February Archived from the original on 7 May Retrieved 23 June Archived from the original on 28 October Retrieved 24 February Official Journal of the European Union.
Retrieved 27 October Retrieved 31 December Archived from the original on 26 August Retrieved 30 May