“Social VAT”: Is it anti-social?

by Jacques Le Cacheux

The prospect of a “social” value added tax, which was raised anew by the President of France on December 31 during his New Year speech, is once again provoking controversy. While the French employers association, the MEDEF, has included this measure in a series of proposed tax changes designed to restore France’s competitiveness, the Left is mostly opposed. It views the “social VAT” as an oxymoron, an antisocial measure that is designed to cut the purchasing power of consumers and hits the poorest among them disproportionately and unfairly. But what exactly are we talking about? And from the viewpoint of taxes on consumption, what is the situation in France relative to its main European partners? Continue reading ““Social VAT”: Is it anti-social?”

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Monetary policy: Open-Market Operations or Open-Mouth Operations?

By Paul Hubert

Can the communications of a central banker influence agents’ expectations in the same way as they change interest rates? To believe Ben Bernanke, the answer is yes. Continue reading “Monetary policy: Open-Market Operations or Open-Mouth Operations?”

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The very great recession

Economic outlook updated for the major developed countries in 2012

OFCE Department of Analysis and Forecasting, under the direction of Xavier Timbeau

The growth outlook for the developed countries, in Europe in particular, have deteriorated dramatically in recent weeks. The “voluntary and negotiated” devaluation of Greek sovereign debt securities, which is really nothing but a sovereign default, the wave of budget cuts being announced even as budget bills are still debated, the inability of the European Union to mobilize its forces to deal with the crisis – all these factors render the forecasts made two months ago obsolete. For many European countries, including France, 2012 will be a year of recession. Continue reading “The very great recession”

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Post-Durban: For a Sino-European axis

By Eloi Laurent

The European Union absolutely must stay the course at the Durban conference and afterwards, not only by reaffirming its climate goals but even more by consolidating these through the improved control of its carbon linkages (see the OFCE note in French: The European Union in Durban: Hold the course), that is to say, the overall impact of its economic growth. This requires moving – on its own if necessary  – from a target for 2020 of a 20% reduction in its greenhouse gas emissions to a target of 30% of its emissions, which is more in synch with the goal that it has endorsed of limiting global warming to 2°C compared to the pre-industrial era. Continue reading “Post-Durban: For a Sino-European axis”

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Regaining confidence in the euro: Three pressing issues

By Jérôme Creel

In a communication on European economic governance before the European Parliament’s ECON Committee on Monday, 17 October 2011, three pressing issues were identified in order to save the euro and improve its management. Continue reading “Regaining confidence in the euro: Three pressing issues”

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From Trichet to Draghi: Results and prospects

By Christophe Blot and Eric Heyer

During eight years as head of the ECB, we have seen two Jean-Claude Trichets (JCT): one dogmatic, the other pragmatic. What will be the face of his successor, Mario Draghi of Italy, as he takes office during the unprecedented crisis facing the euro zone? Continue reading “From Trichet to Draghi: Results and prospects”

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Fiscal consolidation wrong-footed

By Sabine Le Bayon

Should deficit reduction be the priority of governments today?

The constraints imposed by the Stability Pact and especially by the financial markets on Europe’s governments do not leave them much leeway. But while there is no avoiding the issue of the sustainability of public debt, we also need to take into account the recessionary impact of austerity programs on economic activity, particularly during a period of recovery. Continue reading “Fiscal consolidation wrong-footed”

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R&D all at sea: Have electricity producers lost the plot?

By Evens Salies

Is there an inherent conflict between the technological efforts needed to meet the requirements of environmental policies and the liberalization of electricity markets? In effect, the way R&D spending by European electricity producers has changed over the last three decades can give rise to doubts about the ability of the European Union to meet its goal of reducing greenhouse gas emissions by 80% to 93% by 2050 (European Commission, COM/2010/0639). Continue reading “R&D all at sea: Have electricity producers lost the plot?”

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What new European austerity plans await us in 2012?

By Eric Heyer

To meet French commitments vis-à-vis Brussels to a general government deficit in 2012 of 4.5% of GDP, the French Prime Minister Francois Fillon announced a new plan to cut the budget by 7 billion euros. Will the plan, announced 7 November, be sufficient? Certainly not! So what new austerity plans should we expect in the coming months, and what impact will they have on growth in 2012? Continue reading “What new European austerity plans await us in 2012?”

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The G20 Summit in Cannes: Chronicle of a Disappointment Foretold?

By Jérôme Creel and Francesco Saraceno

Too long and too technical, the final declaration of collective action of the G20 Summit in Cannes shows that no clear and shared vision of the economic and financial turmoil that is rocking the global economy has emerged at the Summit. And as Seneca reminds us, the disappointment would have been less painful if success had not been promised in advance. Continue reading “The G20 Summit in Cannes: Chronicle of a Disappointment Foretold?”

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