A unique opportunity for testing whether universal basic income (UBI) on the European level is a realistic option could be provided by its monetary financing as an alternative to “traditional” fiscal ...financing. Fiscal financing of UBI would namely request a much larger European “federal” budget financed by a specific European tax or by participation of the “federation” on some of the existing tax bases, and by agreed upon allotment of the accumulated “federal” fiscal revenues. Though ensuing redistribution of GDP would be relatively modest, the European UBI without an alternative to the tax revenues requirements remains illusionary. Helicopter money (HM) replacing quantitative easing (QE) might provide such an alternative. Modalities of its implementation differ and the idea raises questions of its compliance with the legal regime of the ECB and opens many other topics such as the effectiveness of “QE for the people” and its long-run consequences.
The paper explores the relationship between FDI and economic growth in eight transition countries--EU candidates--in the period 1994-2001. Surprisingly, statistically robust negative causal ...relationship between FDI and growth emerged implying that FDI hampered their real convergence with EU. This result can be explained by the form of FDL In the observed period, acquisitions were the predominant form and the proceeds of the sales were spent on consumption and imports rather than enhancing productive assets. Indeed, current account and FDI were strongly linked; the bigger the inflow of FDI into a country, the higher its current account deficit and foreign debt. Small size of the host countries and concentration of FDI in trade and finance could weaken productivity spillovers while increased efficiency of the acquired firm could be more than offset by the reduction of economic links with local firms. FDI would also not automatically increase competition as it could force small emerging local competitors out of business. While foreign trade increased through FDI, multinationals contributed more to imports than to exports. Finally, while FDI might support human capital formation, this type of spillovers simply does not seem to be very relevant. PUBLICATION ABSTRACT
This paper tries to answer the question of whether universal basic income on the European level is a realistic option or an illusion. As UBI implies a much larger EU budget and a redistribution of ...collected budget revenues, the chance of introducing UBI depends on the required redistribution - the larger the redistribution, the lower the chance. The chance is indirectly assessed by an exercise in which 50 percent of actual tax revenues generated by indirect taxes of member states is collected at the center and distributed equally to all citizens. Though the net costs to the rich are relatively modest, the results indicate that the idea of introducing UBI on the European level is an illusion.
In the continental European countries (EU Member States) an increase of the environmental taxes by 1% after one year leads to a 0.13% reduction in the amount of deposited waste per capita. Across the ...entire business sector and the construction industry this effect is the greatest for the tax on energy used, as well as for the taxes and charges on pollution and the use of natural resources. An increase for 1% in taxes on transport yields a 0.5% reduction in emissions of CO2, and an increase in energy taxes of 1% after one year yields a 0.13% decline in emissions of CO2. When a technological and economic opportunity adapt to changed environmental tax rates, as is the case for the landfill tax, increased tax rates leads to sharp pollution reduction and thus have a limited fiscal effect.
At the time of the possible closure of the significant Slovenian classical electricity production in the Šoštanj Thermal Power Plant and related Velenje Coal Mine, as well as the termination of the ...subsidies of cost-inefficient electric power production in EU member states, electricity prices in Slovenia for one third of its supply would rise to a level set to cover the cost of its production with a conventional gas-steam turbine. Calculated for the price of electricity produced in the Šoštanj Thermal Power Plant, this means an average price increase of 39 €/MWh. Higher prices of electricity would affect the performance and capacity of the Slovenian economy while bringing a reduction to real household income along with annual drops in Slovenian GDP of 0.4%, Slovenia would stand to lose around 2,700 jobs, and the consumer price level would rise by 0.4%.
Because of growing awareness of financial needs for public pensions, attention has been focused on privatisation of the pension systems. While the privatisation of pension funds can encourage ...development of capital markets in New Member States, equity investment in transition economies is even more volatile than in the "old" capitalist countries. Privatised pension system coincides with investment risks, higher administrative costs, and inability of private markets to provide retirees with affordable, indexed and certain annuities. Namely, private sector may not provide enough investment projects to efficiently absorb mandated pension savings and the expected pension income is subject to a number of risks: poor and volatile investment returns, longevity, and inflation eroding the purchasing power of pensions. Indeed, the PAYG system appears to be the only viable system to perform well in terms of risk and volatility of returns. Adapted from the source document.
One of the rarely questioned 'truths' in the present cycle of conventional economic thinking is that ageing and pensioners are endangering the fiscal stability of EU countries. Yet, the data indicate ...that despite a considerable increase of the debatable old age dependency ratio, the shares of pensions in gross domestic product in EU countries stabilised due to the developments in their determinants: the retirement age, the replacement rate, the old age ratio and the development level. This indicates that the threats of 'greedy' pensioners to fiscal stability are highly exaggerated and that solutions for the ageing of the EU population can be found within the existing pay-as-you-go systems, provided there are jobs available. The demographic, 'Lisbon' and financial directions of the European Commission appear to be rather extraneous. Indeed, increased birth rates and migrations might produce more problems than solutions: job creation by the Lisbon strategy seems to consist of empty talks, while changing financing patterns and privatisation would only create redistribution without increasing the funding. PUBLICATION ABSTRACT
'Back to capitalism' and 'Back to Europe' were the slogans of the last decade of the twentieth century in all former socialist countries in Central and Eastern Europe (CEE); they declared ...uncompromising faith in capitalist market mechanisms and the full EU membership, which was considered a panacea for all current and future economic and socio-political problems. Indeed, during a 'golden era' CEE countries considerably outpaced the growth in the 'old' EU countries and rapidly converged to the average EU level of development. However, the growth was 'jobless' and 'unsustainable'; it was to a great extent based on foreign savings. Large current account deficits therefore became a steady feature of CEE countries. The origin of the deficits can be traced to abrupt liberalization of foreign trade in transition while the continuation is linked to FDI. Gradually, CEE countries became fully dependent on the 'old' Europe. Lisbon strategies contributed to the collapse of the manufacturing sector; while CEE countries could easily compete with the 'old' Europe they could not compete with ruthless societies outside Europe. Socially, CEE countries can be put into two groups; some have retained reasonable social cohesion; three Baltic countries are the extreme on the other side. Indeed, while social protection expenditures in old EU members exceed 30 percent of GDP, expenditure is less than 20 percent in seven out of ten CEE countries. Before transition, the EU was admired in former socialist countries for its political democracy and the social market model. When they joined, many features of the attractive European social market model were no longer there and the EU showed little interest to promote the model in transition countries. The emptiness was filled up with neoliberal ideas, which is shown by economic liberty indicators. The global financial crisis, particularly the credit reduction, significantly hit CEE countries with large external financing needs. Foreign banks began to withdraw their capital by shrinking balance sheets in the subsidiaries. At the same time, FDI dropped to one fourth of the pre-crisis level. CEE countries thus faced net outflow rather than urgently needed inflow of capital. Adapted from the source document.
ABSTRACT*: Slovenia has not avoided disputes over privatization: two major concepts competed. The controversies between them resulted in a compromise, and the Law on the Transformation of Social ...Ownership encompassed features of both: decentralization and a gradual approach from one, and predominantly distributive privatization by ownership certificates to all citizens from the other. Insiders (workers and managers) retained majority ownership of most privatized companies by bringing their certificates to their ‘own’ company. Slovenia has thus encouraged a continuation of self‐management. Ownership by insiders has advantages over transfer of ownership rights to formally private institutions established by the state. Actual development confirms that a normal macroeconomic framework, hardening of the soft‐budget constraint, independence of companies, and managers’ loyalty matter more than formal property links.
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