Fiscal Union is the Union that is missing the euro area would be (almost) optimal monetary area. Fiscal Union is a necessity, otherwise the euro cannot survive in the long run. Fiscal Union, many in the EU strongly oppose, because I think that intuitively prredvsem this ‘rich northerners’ subsidize ‘the poor and lazy southerners’. But this ‘gut feeling’ the ordinary citizens does not have a lot in common with the facts. As illustrated by the recent IMF study (Toward a Fiscal Union for the Euro Area), would have the most to gain from fiscal Union, Germany. In the past 28 years have been just 14 years, Germany is entitled to fiscal transfers from the common budget, or the stabilisation fund.
The main purpose of such a Fund for stability is a kind of insurance or compensation mechanism, in which non-euro area Member States shall pay the annual amounts (between 1 and 2% of GDP) and from which you receive transfers, when affected by an asymmetric shock (country-specific crisis, which affects more than popvrečje of the euro area). This transfer mechanism eliminates the European Monetary Union, the built-in error that does not have a mechanism for the correction of the effects of the operation of a common currency, i.e. the creation of large trade imbalances between the members.
In the Member States of the euro area’s past 30 years of frequent crises and asymmetric with the operation of such a joint mechanism in the transfernega all the separate periods of greatly reduced the cost of obtaining and fiscal crises.
Most of the European mechanism, the largest Member of the transfernim acquired right of the euro area. During the period of the current euro crisis were also all members eligible for transfers. But in the period before the crisis between 1982 and 2007, most of the time would have been entitled to compensatory transfers all Germany, in which 14 years of 28 years. Followed by Italy (12 years old), Belgium and the Netherlands (11 years old) and Finland, France, Greece and Portugal (10 years). Slovenia is at the tail end and would have been eligible for transfers only in four years (However, in the short period covered, 1998-2007). For her, only Ireland and Estonia (3 years).
Such a proposal the institutional change of the euro area would of course lead to sustainability in the longer term. Without him, the euro area should fall apart, because no Government before its citizens can in the longer term to justify what’s going on in Greece (the decline of the GDP by 30%, high unemployment) or Spain (25%, 50% unemployment and unemployment among young people) and other PIIGSS. On the other hand, it should be noted that the current ad hoc way of helping countries in trouble means individual Member States at the level of implicit liabilities between 0.75 and 1.25% of GDP. So it’s about as much as Member States would pay into a common fund for stability.
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Among the priorities of the Government are measures which will help entrepreneurs access funding sources, guidelines of management of State assets and fiscal consolidation, was at a meeting of the Board of Directors of the Slovenian Chamber of Commerce (CCIS) Uroš Čufer told the minister of finance. Entrepreneurs eager, above all, concrete measures to improve the business and less rigid labour market.
Slovenia predicts the deficit for this year equal to 1.9 percent of gross domestic product (GDP). It would have been for 0.4 percentage points over last year’s value and the most since 1996, when Slovenia was still on the way from several years of deep crisis. The Government will therefore raise some charges.
The Slovenian Treasury this week presented fiscal projections for this year. The projected general government deficit the highest since 1996, when they amounted to 3.3 percent of GDP.
Slovenia is not a member of the euro zone, although the acquisition of the common currency after the accession treaty obliged. After an unsuccessful folk deciding in the past, the State is likely to continue for a long time will not be entered into the euro area, however, with his solid public finances for many years respected all the rules to enter.
‘Our public finances are in 2013 and 2014, slightly weaker than expected, ‘ this week after reporting to the French news agency AFP acknowledged Slovenian Finance minister. This comes in spite of a slightly higher economic growth than forecast. Last year, this amounted to 1.1 per cent as, which is 0.1 percentage point more than forecast this year of 2.5 and 2.4 percent.
Slovenia, which was once renowned as one of the countries with the largest tax in the world, in the last year, blowing off some steam. The proportion of fiscal revenue in GDP decreased from 53 is a little more than 50 percent.
In General, all State of deep crisis at the beginning of the 90. years of the 20th century is reforming its social model, which has always been considered as the largest proxy for socialism in the developed world.
Now to Slovenia again, forcing a bit more grip, but this year, the State should raise taxes on consumption-on alcohol, tobacco and automobiles. Borg says that you’re the strongest Balkan economic country that is going through a crisis significantly better than the Member States of the euro area, such a step could afford.
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Simon Wren-Lewis writes about the misunderstanding about the way politicians tackling deflation in the euro area. The increase in the primary surplus in the budget at the same time a negative output gap in the central EU countries (Netherlands, Belgium, France, Austria, Finland), shows the inadequacy of the macroeconomic policies.
P P Yolanda:
so stresses that policy in the present moment, of course, is not a fiscal consolidation, but fiscal expansion and boost the economy. Blogger for this relies on the results of Simon Wren-Lewis, who in the case of the Central government of the EU reveals the negative output, which request the fiscal expansion.
I can agree with in principle are written. Only that we have to take it in the lease, if he survived to the end of the euro, he starved and slowly dying, the South of Europe. Coexistence of both is virtually impossible. In doing so, the ideological and political postulates cannot be relied on and does not not rely. It’s only a matter of time when social conditions forced the euro group and the EU as a whole to readjust radically consideration and action by the reform may also be referred to as peaceful. Clothing that is sewn together for Germany and a group of other ‘successful States of the Northern’ they can’t not to wear and not wear the country’s South.
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Why the last ECB-euro-economy measures cannot be drawn from economic depression of the Japanese guy? That’s the question, which is in its last record deals P P Yolanda, who notes that it is a problem that we have now in the euro area in the fact that fiscal and monetary policy in pursuit of a single objective, not States, it is the objective of economic recovery.
Easy, each pulling on your site. The problem is a lack of something that is called ‘a handful of common sense’. It seems as if the economic policy makers, which all have diplomas or even PhD’s from prestigious economic schools, subject to the macro dish junior undergraduate study.
According to the blogger should increase State spending (public investment), monetary policy has to compensate the negative effects of increased State spending on interest rates with the quantitative release, so with the increase in the monetary base.
A handful of common sense, not knowledge. The basis of everything that everyone has this time around, in front of, or behind, the industrial design. Only the new products mean new jobs and social science not heads of Government.
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At a recent Conference in Jackson Hole’s Mario Draghi to fiscal policy changes direction and help monetary and structural reforms.
P P Yolanda told me he actually told … that claims most of the Governments and international institutions and economists: that any cost-saving kills economic growth and the EU’s taking in a long deflationary depression. But German politicians not put, and continue to argue that the ‘growth and fiscal consolidation are not in conflict’ and ignoring statistics and economic research.
The following is the results of present P some of the research that I do not acknowledge the German theory.
What about the Slovenian economy. Of course, not alone, but is saved by public costs to further strengthen its economic growth. And well, that is not saved, because otherwise it would be a disaster even greater in the EU, believes Damian.
For Germany is nothing to be afraid of. We’re going to the rest of the South of the Republic, in particular, worked for the German bank. Many times I think it is Ms Merkel without a single bolt of lightning reached more in a more friendly way than Hitler with his vast military machine. I’m sorry, but English politics-deni and left, too, that your brain lackeys to activate – if there is no communication between brain cells too disabled for too much loneliness.
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Candidate for Finance Minister Dušan Mramor was on the finance Committee by 14 votes in favour and six against. Continuation of savings and attract investors, predicts.
Mramor is in defending explained that sees an opportunity to get out of the crisis in the financial system, which serviced the solid economy and population. The first task should be to economic independence, which can be achieved only by means of a competitive economy, he said.
” The economy is weak, but if you have the option, as appropriate to support the exit from the crisis, ‘stressed Mramor, who was finance minister during the 2002 and 2004. It is pointed out that in Slovenia for many years, imbalances (in the area of public finances, the financial market and the labour market), resulting in low or negative economic growth.
What about new fiscal law in Slovenia?
Time and space for political games no longer
‘s situation is serious. Room for manoeuvre for various political and blockades, ” not dribble has warned, if confirmed and announced for the Finance Minister, restrictive fiscal policy. When we get the deficit below the required three percent of GDP, it must try to reduce the debt below 60 percent of GDP.
In the long term, the EU will have to bite the tighter fiscal integration, without which there will not be a stable monetary Union in Ljubljana today warned Economist Charles Mrak. He’s worried about the failure of pressure and will to carry out the structural reforms which, in his opinion, should be continued.
The University of Ljubljana, Faculty of Economics, and a consultation of the European Commission on the situation and challenges in the euro area the weaknesses in the original structure of economic governance in the EU. Have not complied with the one of the key things is that monetary Union needs very serious fiscal leg ‘. ” Because there was no political appetite at the time that goes into it, it was looking for a second-best solution. This is the stability and Growth Pact, ‘he said.
This solution is envisaged to have ‘ each in his own house in order. ‘ The Pact were in fact laid down the upper limit for the public deficit and public debt. ‘ Through the crisis has shown that this is not enough, ‘he told Mr. Mrak and the infringement of the rules in Germany and France come to the dilution of the Pact, in a crisis, we came unprepared. Another disadvantage was that the euro area had no mechanism to deal with crises.
News about fiscal changes in Slovenia
At the time of the last crisis, the importance of the stability and Growth Pact as a mechanism for the prevention of crises intensified. In legal terms, the case is greatly expanded, we have a fiscal pact was introduced the so-called ‘European semester’, put in place a new mechanism to deal with crises, who is from the temporary mechanism in the EFSF permanent, that is, ESM, establishes the Banking Union. ” These are the key pillars of the new arrangements, ‘ he explained the dusk.
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By the end of April the Government in Brussels to send a National reform program and the stability program, in which it will be written, and how we want to live in Slovenia.
More is coming deadline for submitting documents, the greater the jitters between employers, trade unions, political parties and citizens. Until now, only to see the draft of the programme, from which concrete measures have not yet been identified, from the individual statements that we have heard in recent days, however, is that despite the restart economic growth for an extended period of belt tightening.
About what will end up in the papers, which will have journeyed to Brussels, the coalition partners started to talk or negotiate, yesterday. The basic starting point should be the promotion of investment, structural reforms and fiscal responsibility.
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Patrick wants a list of concrete measures.
The words that we have heard a million times, but what citizens interested in concrete actions, which will be known in the quality of their stay.
As we have already noted, it is becoming increasingly clear that the Government thinks Mira Cerarja measures that brought them the law on balancing finances, from temporary to permanent. If you remember, the us Government in 2012 due to the crisis made that we are feeding ‘temporarily’ shut down. ‘ Until the end of the crisis, ‘they said.
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