Smart carbon pricing is the best way to meet budget deficits

In the last four years, we have been in the throes of the most serious financial and economic turmoil Europe has seen in 80 years. Nearly all EU member states are facing substantial budget deficits and are struggling with high levels of public debt. Most committed themselves to strict austerity meas...

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Bibliographic Details
Published in:International tax review 2012-06
Format: Magazinearticle
Language:English
Subjects:
Budget deficits
Carbon
Consumption
Costs
Economic crisis
Economic development
Emissions control
Emissions trading
Employment
Energy industry
Environmental tax
Fiscal policy
GDP
Gross Domestic Product
Income taxes
Macroeconomics
Political behavior
Public debt
Reforms
Tax rates
Tax reform
Taxation
VAT
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Summary:In the last four years, we have been in the throes of the most serious financial and economic turmoil Europe has seen in 80 years. Nearly all EU member states are facing substantial budget deficits and are struggling with high levels of public debt. Most committed themselves to strict austerity measures within the scope of the Fiscal Compact in March 2012. Now it seems the tide is turning. Austerity has slowed the recovery. In the Netherlands, the government has collapsed because of non-agreement on how to meet the Fiscal Compact's strict obligations. Others, such as Spain, have defied their 2012 budget deficit targets laid down by the EU - in the Spanish case, to reduce the deficit to 4.4% of GDP. In Greece, elections have been followed by failure to form a government, and it is looking increasingly likely that the country will leave the Euro. In the face of these political and fiscal crises, policy makers are coming under pressure to re-think their approach and to identify policies to reduce budget deficits while protecting jobs and keeping money flowing through the economy.
ISSN:0958-7594