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  • Author: Adam Śmietanka, Alejandro Esteller Moré, Grzegorz Poniatowski, José María Durán-Cabré, Mikhail Bonch-Osmolovsky
  • Publication Date: 10-2019
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: This Report has been prepared for the European Commission, DG TAXUD under contract TAXUD/2017/DE/329, “Study and Reports on the VAT Gap in the EU-28 Member States” and serves as a follow-up to the six reports published between 2013 and 2018. This Study contains new estimates of the Value Added Tax (VAT) Gap for 2017, as well as updated estimates for 2013-2016. As a novelty in this series of reports, so called “fast VAT Gap estimates” are also presented the year immediately preceding the analysis, namely for 2018. In addition, the study reports the results of the econometric analysis of VAT Gap determinants initiated and initially reported in the 2018 Report (Poniatowski et al., 2018). It also scrutinises the Policy Gap in 2017 as well as the contribution that reduced rates and exemptions made to the theoretical VAT revenue losses. In 2017, growth in the European Union (EU) continued to accelerate with a combined real GDP growth of 2.5 percent, providing a sound environment for an increase in VAT collections. As a result, VAT revenue increased in all Member States (MS). An increase in the base was the main, but not the only, source for growth. Increase in compliance contributed to an approximate 1.1% increase in VAT revenue. In nominal terms, in 2017, the VAT Gap in EU-28 MS fell to EUR 137.5 billion, down from EUR 145.4 billion. In relative terms, the VAT Gap share of the VAT total tax liability (VTTL) dropped to 11.2 percent in 2017 and is the lowest value in the analysed period of 2013-2017. Fast estimates for 2018 indicate that the downward trend will continue and that VAT Gap will likely fall below EUR 130 billion in 2018. Of the EU-28, the VAT Gap as percentage of the VTTL decreased in 25 countries and increased in three. The biggest declines in the VAT Gap occurred in Malta, Poland, and Cyprus. The smallest Gaps were observed in Cyprus (0.6 percent), Luxembourg (0.7 percent), and Sweden (1.5 percent). The largest Gaps were registered in Romania (35.5 percent), Greece (33.6 percent), and Lithuania (25.3 percent). Overall, half of EU-28 MS recorded a Gap above 10.1 percent (see Figure 2.2 and Table 2.1). The Policy Gaps and its components remained stable. The average Policy Gap level was 44.5 percent, out of which 9.6 percentage points are due to the application of various reduced and super-reduced rates instead of standard rates (the Rate Gap). The countries with the most flat levels of rates in the EU, according to the Rate Gap, are Denmark (0.8 percent) and Estonia (3 percent). On the other side of spectrum are Cyprus (29.6 percent), Malta (16.5 percent), and Poland (14.6 percent). The Exemption Gap, or the average share of Ideal Revenue lost due to various exemptions, is, on average, 35 percent in the EU, whereas the Actionable Policy Gap – a combination of the Rate Gap and the Actionable Exemption Gap – is, on average, 13 percent of the Notional Ideal Revenue. The econometric analysis repeated after the 2017 Study confirmed the earlier results. We observe that the dispersion of tax rates and unemployment rate have a positive impact on the VAT Gap. Regarding the variables in hands of the administration, on the extended times series compared to the previous year, our results suggest that the nature of the expenditure of the administration, in particular IT expenditure, is more important that the amount of the overall resources.
  • Topic: Economy, Economic Growth, Tax Systems, Fiscal Policy
  • Political Geography: Europe, Poland, European Union
  • Author: Marek Dabrowski
  • Publication Date: 03-2019
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: Twenty years of euro history confirms the euro’s stability and position as the second global currency. It also enjoys the support of majority of the euro area population and is seen as a good thing for the European Union. The European Central Bank has been successful in keeping inflation at a low level. However, the European debt and financial crisis in the 2010s created a need for deep institutional reform and this task remains unfinished.
  • Topic: Monetary Policy, European Union, Economy, Economic Growth, Fiscal Policy, Currency
  • Political Geography: Europe, Poland, European Union
  • Author: Maciej Bałtowski, Piotr Kozarzewski
  • Publication Date: 08-2019
  • Content Type: Working Paper
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: The paper discusses the role of the state in shaping an economic system which is, in line with the welfare economics approach, capable of performing socially important functions and achieving socially desirable results. We describe this system through a set of indexes: the IHDI, the World Happiness Index, and the Satisfaction of Life index. The characteris-tics of the state are analyzed using a set of variables which describe both the quantitative (government size, various types of governmental expenditures, and regulatory burden) and qualitative (institutional setup and property rights protection) aspects of its functioning. The study examines the “old” and “new” member states of the European Union, the post-communist countries of Eastern Europe and Asia, and the economies of Latin America. The main conclusion of the research is that the institutional quality of the state seems to be the most important for creation of a socially effective economic system, while the level of state interventionism plays, at most, a secondary and often negligible role. Geographical differentiation is also discovered, as well as the lack of a direct correlation between the characteristics of an economic system and the subjective feeling of well-being. These re-sults may corroborate the neo-institutionalist hypothesis that noneconomic factors, such as historical, institutional, cultural, and even genetic factors, may play an important role in making the economic system capable to perform its tasks; this remains an area for future research.
  • Topic: Demographics, Economy, Economic Growth, State, Economic Policy, Institutions, Trade, Welfare
  • Political Geography: Europe, Eastern Europe, Asia, Latin America, European Union
  • Author: Lukasz Janikowski, Marek Dabrowski
  • Publication Date: 09-2018
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: Virtual currencies are a contemporary form of private money. Thanks to their technological properties, their global transaction networks are relatively safe, transparent, and fast. This gives them good prospects for further development. However, they remain unlikely to challenge the dominant position of sovereign currencies and central banks, especially those in major currency areas. As with other innovations, virtual currencies pose a challenge to financial regulators, in particular because of their anonymity and trans-border character.
  • Topic: Science and Technology, Monetary Policy, Economic Growth, Currency, Trade
  • Political Geography: Europe, Poland, European Union
  • Author: Marek Dabrowski
  • Publication Date: 04-2018
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: In the last decade, advanced economies, including the euro area, experienced deflationary pressures caused by the global financial crisis of 2007-2009 and the anti-crisis policies that followed—in particular, the new financial regulations (which led to a deep decline in the money multiplier). However, there are numerous signs in both the real and financial spheres that these pressures are disappearing. The largest advanced economies are growing up to their potential, unemployment is systematically decreasing, the financial sector is more eager to lend, and its clients—to borrow. Rapidly growing asset prices signal the possibility of similar developments in other segments of the economy. In this new macroeconomic environment, central banks should cease unconventional monetary policies and prepare themselves to head off potential inflationary pressures.
  • Topic: Economics, Monetary Policy, Economic Growth, Inflation, Macroeconomics, Unemployment
  • Political Geography: Europe, Global Focus, European Union
  • Author: Marek Dabrowski
  • Publication Date: 07-2017
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. It has already revolutionised financial services and, most likely, will continue to do so in the future. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009. However, financial innovation will not seriously affect the process of monetary policymaking and is unlikely to undermine the ability of central banks to perform their price stability mission.
  • Topic: Energy Policy, Environment, Monetary Policy, Financial Crisis, Economic Growth, Innovation, Trade
  • Political Geography: Europe, Global Focus, European Union
  • Author: Zbigniew Polański
  • Publication Date: 12-2017
  • Content Type: Working Paper
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: This paper contrasts the impact of the 1929 and 2008 world crises on the Polish economy. Her much better performance during the recent crisis can be explained by two groups of factors: first, by very different stabilization policies and second, by distinct structural developments (resulting both from authorities' structural policies and spontaneous processes). It is emphasized that several factors responsible for Poland's superior performance during the 2008 crisis also contributed to her economic success vis-à-vis other European Union countries.
  • Topic: Financial Crisis, Economic structure, Economic Growth, Global Financial Crisis, Trade
  • Political Geography: Europe, Poland, European Union
  • Author: Robert Stehrer, Roman Stöllinger, Sandra Leitner
  • Publication Date: 11-2017
  • Content Type: Working Paper
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: Global trade patterns are changing rapidly. Emerging economies are increasing their share of exports overall and intensifying competition in nearly all sectors. Using a gravity-based approach, this report examines the future profile of European Union (EU) world market shares at the aggregate and sectoral level. It further points towards the changing patterns of trade within the EU. Based on the results, some conclusions on EU industrial policy are drawn.
  • Topic: Industrial Policy, International Trade and Finance, Global Markets, Economic Growth, Trade
  • Political Geography: Europe, Global Focus, European Union
  • Author: Renata Karkowska
  • Publication Date: 11-2017
  • Content Type: Working Paper
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: The goal of this study is to identify empirically how country-level development, taking into account the financial and macroeconomic environment, affect the risk profiles of the banking sector in Europe. Through a dataset that covers 3,399 European banks spanning the period 1996-2011, and the methodology of panel regression, the empirical findings document the heterogeneity of banking risk determinants. I examine the implications of bank leverage that manifest itself as spreading and growing instability. The study contributes to and combines the different strands of literature and understanding of the importance of the links between the variables. It also contributes to the literature by focusing on a group of countries from Central and Eastern Europe and the Commonwealth of Independent States that have not been studied before. The extended model provides a causal link between risk in the banking sector and the growth of the financial market and macroeconomy. I apply four measures of country-level development that are available in previous studies: share of foreign ownership in the banking sector; the financial freedom index; the real growth rate; and stock market capitalization. Using these measures, I obtain different results which highlight the fact that the effect of macroeconomic and financial development on banking sector risk-taking is ambiguous.
  • Topic: Financial Markets, Economic Growth, Banks, Trade Liberalization, Macroeconomics, Trade
  • Political Geography: Europe, Eastern Europe, Central Europe, European Union
  • Author: Daniel Daianu
  • Publication Date: 11-2017
  • Content Type: Working Paper
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: The financial crisis and its ensuing effects have brought back into the limelight the issue of cycles and of policies which fuel or mitigate crises. Cognitive and operational models in economics and business are questioned. There is a specter of much lower economic growth in the industrialized world. Central banks are over-burdened. This makes central bankers’ lives much more complicated and obfuscates the boundaries between monetary policy and fiscal policy, especially when financial stability gets to center stage. New systemic risks show up in capital markets. The eurozone has escaped collapse owing to the European Central Bank’s extraordinary operations and large macro-imbalance corrections in its periphery, but major threats persist. This paper focuses on economic cycles and policies in an international (European) context. Attention is paid to linkages between domestic cycles and the European financial cycle, drivers of financial cycles, finance deregulation and systemic risks, ultra-low interest rates, the international policy regime, and global stability. The experience of European emerging economies is taken into account.
  • Topic: Debt, Monetary Policy, Financial Crisis, Economies, Economic Growth, Interest Rates, Fiscal Policy
  • Political Geography: Europe, European Union
  • Author: Xavier Cuadras-Morató
  • Publication Date: 05-2017
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: Catalonia is one of the richest regions in Spain. Until the outbreak of the international financial and economic crisis in 2008, it enjoyed a phenomenal economic boom – which then turned into a very severe depression, from which the region began to exit only in 2014. Consolidating the recovery and making the economy more competitive and resilient, and less volatile, are some of the key challenges of economic policy in Catalonia. Also, to improve the region’s social cohesion, policymakers should make sure that economic prosperity is more widely shared, and transform it into an effective tool for social progress.
  • Topic: Demographics, Labor Issues, Economic Growth, Social Policy, Global Financial Crisis, Economic Policy, Trade, Recovery
  • Political Geography: Europe, Spain, Catalonia, European Union
  • Author: Aleksander Łaszek
  • Publication Date: 03-2017
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: Poland’s structural deficit is one of the largest in the EU. While other Member States are taking action to reduce their deficits, the Polish government has not only introduced costly projects, but has also announced additional projects that will further aggravate the state of Polish public finances. The aim of maintaining the nominal deficit under 3% of GDP, as declared by the government, is insufficient because it does not leave a margin of safety in case of an economic slowdown. In the meantime, the turbulent global economy and the structural challenges the Polish economy is facing make the scenario of an economic slowdown increasingly plausible. Dr. Aleksander Łaszek evaluates the government’s current policy through the lens of the challenges that stand a head of Polish economy, and its resilience to shocks, in the new mBank-CASE Seminar Proceedings "Economic policy, the international environment and the state of Poland’s public finances: Scenarios".
  • Topic: Debt, Government, Finance, Economic Growth, Trade, Deficit
  • Political Geography: Europe, Poland, European Union
  • Author: Grzegorz Poniatowski, Mikhail Bonch-Osmolovsky, Misha V. Belkindas
  • Publication Date: 09-2016
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: The analysis serves as the Final Report for the DG TAXUD Project 2015/CC/131, “Study and Reports on the VAT Gap in the EU-28 Member States”, which is a follow up to the reports published in 2013, 2014, and 2015. In this report, estimates of the VAT Gap and the Policy Gap for the year 2014 are presented, as well as revised estimates for the years 2010–2013 “due to the transmission” of Eurostat national accounts from the ESA95 to the ESA10. This update covers Croatia, which was not included in the previous updates. While it was hoped that the update would also cover Cyprus, it has not been possible due to incomplete national accounts data. The VAT Gap is a measure of VAT compliance and enforcement that provides an estimate of revenue loss due to fraud and evasion, tax avoidance, bankruptcies, financial insolvencies, as well as miscalculations. It is defined as the difference between the amount of VAT collected and the VAT Total Tax Liability (VTTL), which is expressed in the report in bothabsolute and relative terms. The VTTL is the theoretical tax liability according to tax law, and is estimated using a “top-down” approach.
  • Topic: Economic Growth, Tax Systems, Macroeconomics, Fiscal Policy, Innovation, VAT, Trade
  • Political Geography: Europe, Poland, Croatia, European Union
  • Author: Marek Dabrowski
  • Publication Date: 02-2016
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: The European Central Bank (ECB) recently became engaged in macro-prudential policies and the micro-prudential supervision of the largest Euro area banks. These new tasks should help complete financial integration, and make the Euro area more resilient to financial instability risks. However, the multiplicity of mandates and instruments involves a risk of their inconsistency which could compromise the ECB’s core price-stability mandate as well as its independence. The experience of central banks during the recent global financial crisis confirms that such risks are not purely hypothetical.
  • Topic: Monetary Policy, Economic Growth, Banks, Macroeconomics, Innovation, Trade, European Central Bank
  • Political Geography: Europe, European Union
  • Author: Aleksander Łaszek, Andrzej Rzońca, Andrzej Halesiak
  • Publication Date: 11-2016
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: Growth in the European Union since the outbreak of the global financial crisis is slower (1) than before the crisis, (2) than the trend would indicate, (3) than forecast and (4) than in the United States. The factors driving its weakness lie more on the supply side than the demand side. The loss of potential output after the crisis was exacerbated by inequalities from before the crisis; fiscal stimulus from 2007-2009, increasing public expenditure despite the lack of fiscal space; excessive liquidity support for banks; and inflexibility of the market for goods at the moment the crisis broke out. The problems with growth may deepen and become permanent if social support for anti-market parties continues to grow. Extremist parties are supported by divergence among the countries of the “old” EU and the slowdown of convergence in the new member states, as well as tendencies related to inequality, in particular the reduction of households’ mobility between income groups. The 144th mBank - CASE Seminar Proceedings consist of the main paper "On Economic Growth in Europe, or, The Uncertain Growth Prospects of Western Countries" by Andrzej Rzońca and Aleksander Łaszek and the commentary "Economic Growth in Western Europe: The Investment Perspective" by Andrzej Halesiak.
  • Topic: Economic Growth, Investment, Economic Policy, Macroeconomics, Trade
  • Political Geography: Europe, Western Europe, European Union
  • Author: Gábor Oblath
  • Publication Date: 09-2016
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: The publication "Economic policy and macroeconomic developments in Hungary, 2010–2015" discusses the factors responsible for Hungary’s growth performance. In the 143rd mBank - CASE Seminar Proceedings Gábor Oblath argues that that the factors essentially responsible for Hungary’s growth performance over the last five or six years were mainly exogenous to Hungarian government policy. The acceleration of economic growth observed in 2014 was due to, in particular, exceptionally large transfers from EU funds, which have nothing to do with the government’s so called “unorthodox” economic policy. By contrast, the decline in the quality of the institutional environment of the economy is a direct consequence of both the spirit and the methods of the economic policy pursued.
  • Topic: Government, Economic Growth, Economic Policy, Macroeconomics
  • Political Geography: Europe, Hungary, European Union
  • Author: Grzegorz Poniatowski, Jarek Neneman, Tomasz Michalik
  • Publication Date: 07-2016
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: Since 2009, despite constant growth in the tax base and only slight variations in effective rates, the trend in VAT revenue in Poland has been reversed, and inflows have become less stable. The ongoing decline in VAT collection and the increase in the uncertainty related to the main component of budget revenues is a very important problem, which in the light of growing budget spending may threaten the stability of public finances. In the new mBank - CASE Seminar Proceedings three experts: Grzegorz Poniatowski, dr. Jarosław Neneman and Tomasz Michalik examine the structure and the causes of the VAT gap as well as the legal context and possible methods of improving VAT compliance at national and European level.
  • Topic: Budget, Economic Growth, Tax Systems, Fiscal Policy, VAT
  • Political Geography: Europe, Poland, European Union
  • Author: Barbara Nowakowska, Piotr Noceń, Michał Surowski, Michał Popiołek
  • Publication Date: 02-2016
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: In the publication, Barabara Nowakowska and Piotr Noceń discuss 'Poland’s Private Equity Market: Current Conditions and Development Prospects', and Michał Surowski and Michał Popiołek describe 'Private Equity From a Bank’s Perspective'.
  • Topic: Development, Markets, Financial Markets, Economic Growth, Banks, Innovation, Trade
  • Political Geography: Europe, Poland, European Union
  • Author: Luca Barbone, Mikhail Bonch-Osmolovsky, Grzegorz Poniatowski
  • Publication Date: 10-2015
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: This report provides estimates of the VAT Gap for 26 EU Member States for 2013, as well as revised estimates for the period 2009-2012. It is a follow-up to the report “Study to quantify and analyse the VAT Gap in the EU-27 Member Statess, published in September 2013 (hereafter: 2013 Report), and to the report “2012 Update Report to the Study to Quantify and Analyse the VAT Gap in the EU-27 Member States” , published in October 2014 (hereafter: 2014 Report). As in previous reports, it was not possible to include estimates for Croatia and Cyprus, due to as-yet-incomplete national account statistics for the two countries. The VAT Gap is an indicator of the effectiveness of VAT enforcement and compliance measures, as it provides an estimate of revenue loss due to fraud and evasion, tax avoidance, bankruptcies, financial insolvencies as well as miscalculations. As the VAT Gap in this study is based on a top-down approach, it does not readily lend itself to be deconstructed according to industrial sectors or other criteria (territorial, professional), and can be best used as a diagnostic tool in the context of its evolution over time. As discussed in previous reports, the VAT Gap is defined as the difference between the amount of VAT actually collected and the VAT Total Tax Liability (VTTL), in absolute or percentage terms. The VTTL is an estimated amount of VAT that is theoretically collectable based on the VAT legislation and ancillary regulations. This report calculates, for each country the VTTL on the basis of national accounts, by mapping information on standard, reduced rates and exemptions onto data available on final and intermediate consumption, as well as gross fixed capital formation, from national accounts and use tables. Thus, the quality of the VAT Gap estimates depends on the accuracy and completeness of national accounts data and use tables. The year 2013 saw a continuing overall unfavourable economic environment, as the GDP of the European Union was nearly stagnant. This contributed to a slowdown of nominal final consumption and of other economic aggregates that form the basis of the Value Added Tax. Six countries applied changes to standard or reduced rates in 2013, marking a relatively stable policy environment. During 2013, the overall VAT Total Tax Liability (VTTL) for the EU-26 Member States grew by about 1.2 percent, while collected VAT revenues rose by 1.1 percent. As a result, the overall VAT Gap in the EU-26 saw an increase in absolute values of about Euro 2.8 billion, to reach Euro 168 billion. As a percentage, the overall VAT Gap stayed constant at 15.2 percent. The median VAT Gap rose by 1.6 percentage point, to reach 13.9 percent. In 2013, Member States’ estimated VAT Gaps ranged from the low of 4 percent in Finland, the Netherlands and Sweden, to the high of 41 percent in Romania. Overall, 15 Member States decreased their VAT Gap, with the largest improvements noted in Latvia, Malta and Slovakia. 11 Member States saw an increase in the VAT Gap, generally of small magnitudes, with the largest deteriorations in Estonia and Italy. This report also provides new and expanded evidence on the Policy Gap for the EU-26. The Policy Gap is an indicator of the additional VAT revenue that a Member State could theoretically collect if it applied standard rate to all consumption of goods and services supplied for consideration. We provide here estimates of the Policy Gap adjusted to take into account items that could not easily be taxed even in an “ideal” system (imputed rents, public goods, financial services). The results moderate views of the relative importance of reduced rates and exemptions in reducing the revenue potential of VAT, and suggest that better enforcement remains a key component of any strategy of improvement of the VAT system. The results of this report and the underlying data were presented to Member States in advance of publication and discussed on several occasions with the representatives of Member States. Deviating approaches and views of Member States are noted in the relevant country section in Chapter 3. The authors are grateful for the constructive cooperation and helpful input of Member States.
  • Topic: Economic Growth, Macroeconomics, Fiscal Policy, Innovation, VAT, Trade
  • Political Geography: Europe, European Union
  • Author: Monika Blaszkiewicz
  • Publication Date: 07-2015
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: The design of the euro area Quantitative Easing (QE) programme raises the question of whether insufficient liquidity in the bond markets will reduce the impact of the programme and lead to market volatility. While estimates suggests that scarcity of around €102 billion may arise over the life of the programme, to date the QE programme has met its monthly targets and bond market volatility has been managed. Questions also arise in respect of the fact that risk is not fully shared on up to €738.4 billion to be purchased over the life of the programme. Partial risk sharing raises the spectre of defaulting central banks exiting the euro system, and existing members being unwilling to bear associated costs, and thus the future of the euro area. However, estimations suggest that, at present, all national central banks should be able to bare losses stemming from sovereign debt purchases under the current round of QE. This report was prepared within a research project entitled Sovereign bond purchases and risk sharing arrangements: Implications for euro-area monetary policy, which received funding from the European Parliament.
  • Topic: Finance, Economic Growth, Banks, Trade, European Central Bank
  • Political Geography: Europe, European Union
  • Author: Marek Radzikowski, Mieczysław Groszek
  • Publication Date: 08-2015
  • Content Type: Special Report
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: The present document is an attempt at a comprehensive analysis of direct and indirect burdens imposed upon banks in 2015. The idea to present such factors — which are often extremely varied in nature — in a single study was born out of the fact that these factors are often considered separately, on the basis of various criteria, which causes them to be split into different groups. This approach results in a fairly common tendency for fragmentary assessment of their impact and, more importantly, in the adoption of piecemeal regulations which fail to take into account the full impact of the actions taken in different areas. This applies in equal measures to supervisory authorities, regulators, analysts, policymakers and the media, which means that, in a somewhat oversimplified sense, the above statement is applicable to the public at large. This situation can be most succinctly characterised in the manner presented below. In the aftermath of the crisis, banks require a new set of instruments to regulate the functioning thereof. This is because they are to become more stable, safe, less risk-prone and more customer-friendly. Each of these areas requires a separate set of regulatory instruments, along with the respective subgroups thereof. Oftentimes they are not synchronised with each other and are usually aimed at the implementation of a specific, particular goal to an excessive extent. In addition, there are also “special tasks” such as the reform of the Credit and Saving Unions (SKOK).
  • Topic: Finance, Economic Growth, Banks, Trade
  • Political Geography: Europe, Central Asia, Caucasus, Eastern Europe, Poland, European Union
  • Author: Jørgen Mortensen
  • Publication Date: 08-2013
  • Content Type: Policy Brief
  • Institution: Center for Social and Economic Research - CASE
  • Abstract: The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, adopted in March 2012 entered into force in January 2013 was presented as a reinforcement of the Stability and Growth Pact. The present Brief argues that this new Treaty does not seem to offer a definitive solution to the problem of finding the appropriate budgetary-monetary policy mix in the EMU and that it may complicate some aspects of the economic policy governance in the Eurozone. This E-brief is based on Jorgen Mortensen’s presentation at the EUROFRAME Conference 2013 "Towards a better governance in the EU?" held on May 24th, 2013.
  • Topic: Economic Growth, Economic Policy, Macroeconomics, Eurozone
  • Political Geography: Europe, European Union