"In France, prime minister Hollande is presenting the details of the 2013 budget to his cabinet this morning. The budget is expected to include tough spending freezes and tax rises for the wealthy as Paris struggles to rein in its deficit."
Just a second: tax rises for the wealthy is not typically classed as "austerity".
There are two sides to fixing the finances of the state:
a) cutting expenditure, i.e. welfare, public sector jobs, wages and pensions, all of which certainly hit the unemployed and low paid. One can also cut procurement of things like weapons but often the interests of the "defence" industry are well protected.
b) increasing income via taxation. Here, there are options. One can increase indirect taxation and hit the poor or introduce higher marginal taxes for the wealthy, capital gain tax, corporation taxes etc. Some of the latter of course have become risqué economic policies because highly mobile globalised capital can blackmail governments with disinvestment.
However, I would certainly not classify tax rises for the wealthy as "tough austerity" in the classic definition of austerity. Some "austerity for the rich" is long overdue. Inequality has kept increasing in the context of the worst crisis and impoverishment of the populations of Europe.
However, I would certainly not classify tax rises for the wealthy as "tough austerity" in the classic definition of austerity. Some "austerity for the rich" is long overdue. Inequality has kept increasing in the context of the worst crisis and impoverishment of the populations of Europe.
Waiting to see what Hollande is proposing anyway ... I doubt that it will be a vicious attack on the rich.
7 comments:
Fitch affirms UK's AAA rating
Some late breaking news, Fitch has just affirmed the UK's AAA credit rating, with a negative outlook.
The agency said that Britain's "high-income, diversified and flexible economy" and its control of its own currency, means it still deserves a top credit rating.
But, Fitch also warns that any discretionary fiscal easing could trigger a downgrade.
I am getting ready to feel very sad as I watch from Britain what is unfolding in France. There is another way of doing things than the rampant class arrogance of our British government who don't give a toss about the people who created their wealth for them in the first place. They stole it from us before and they are stealing it again. For example the people who created the NHS are not the private companies who are going to benefit from its dismantling but the dedicated doctors, nurses and ancillary workers who will get nothing. And I think we are about to see France go about dealing with the economic situation in another way. Perhaps in part because they had a revolution over there, we never did really. We are still subjects, they are citizens.
there is no money and we are all going to get poorer.
€15 trillion is swindled away in offshore tax havens, so there obviously is some money around! Just as a reference, the deficit in 2010 for the whole Eurozone was €550 billion.
IfigEusLannuon
28 September 2012 9:06AM
It's interesting to compare the French and the Spanish budgets:
* French budget : 30 bill euros effort, with 20 bill tax increase, targetted on highest revenues, 10 bill spending reduction
* Spanish budget : 39 bill euros effort, mainly on spending cuts, and with tax increases by the VAT, ie for everybody
So even within austerity, there can be some policies difference.
Spain plans to borrow 207.2 billion euros ($266.5 billion) next year, the Budget Ministry said today, as pressure builds for Prime Minister Mariano Rajoy to tap the European rescue fund instead of financial markets.
Spain’s debt will widen to 90.5 percent of gross domestic product in 2013 as the state absorbs the cost of bailing out its banks, the power system and euro-region partners Greece, Ireland and Portugal. This year’s budget deficit will be 7.4 percent of economic output, Budget Minister Cristobal Montoro said at a press conference. Spain’s 6.3 percent target will be met because it can exclude the cost of the bank rescue, he said.
Enlarge image
Prime Minister Mariano Rajoy has held off seeking aid since ECB President Mario Draghi last month said he’ll buy Spanish debt if Rajoy accepts conditions. Photographer: Jock Fistick/Bloomberg
.
Spain’s borrowing plans may test investors’ willingness to continue financing the government with the European Central Bank waiting to buy the country’s debt should Rajoy agree to conditions. The government this past week unveiled 43 measures designed to boost economic growth that Economic and Monetary Affairs Commissioner Olli Rehn said go beyond the European Union’s recommendation for Spain’s restructuring.
The budget “seemed to be an indication that Spain would be asking for some official financing soon,” Megan Greene, director of European economics at Roubini Global Economics LLC, said in a Bloomberg radio interview Sept. 28. “There’s huge political pressure on Spain already.”
A period of calm in Europe's more troubled economies created by the European Central Bank president Mario Draghi, when he announced plans to buy the debt of countries who asked for bailouts in the future, also seemed to have come to an end. And with the threat of Catalan separatism adding to worries about Rajoy's ability to control events in Spain, many now expect him to ask for a full bailout for the country – placing it in the hands of those who have forced Greece, Portugal and Ireland into round after round of spending cuts.
Tell it like it is, Giles! Spain is **cked...What people should understand is that there's no benefit system like there is in the U.K.No rents paid, no child allowance as such. Little help for groups like the disabled. Most people will get little or no unemployment benefit... Even school books have to be paid in full once more. To give you an example...most cost over 30 euros each. Unemployment is 25% but about 50% in the under 25s. The banks are literally robbing customers who were sold accounts which might never pay out to replace their fixed deposit accounts. Even bank employees were fooled by the smallprint. Wages are falling but it's been made far easier to make workers redundant. Companies only have to prove a drop in profits over a fixed period. So, that means wealthy companies like Telefónica are making thousands redundant...The list could go on and on. I'm waiting for the powers that be to explain how people are going to live on thin air. Does anyone really wonder why people are angry? This is only the start!
Post a Comment