This team of authors has a lot of credibility in the analysis of corporate tax reform. They give their views on EU proposals in this VOX article.
George Kopits (former chair of the Hungarian Fiscal Council) will give a talk in TCD on March 22, 12.30-2 in IIIS seminar room on “Rules-Based Fiscal Framework: Rationale, Experience, and Good Practices”.
All welcome!
Bio:
George Kopits is former chair of the Fiscal Council, Republic of Hungary—elected unanimously by Parliament in February 2009. During 2004-09, he was a member of the Monetary Council, National Bank of Hungary.
Kopits began his professional career in 1968-74 at the Office of the Secretary, U.S. Treasury Department. In 1974, he joined the International Monetary Fund, where he served as assistant director until 2003. In the Fund’s European Department, his assignments included surveillance of major Mediterranean and Eastern European economies. In 1990, he was appointed group leader in the Task Force on the Soviet Economy. In the Fiscal Affairs Department, he coordinated several projects for the Executive Board, and contributed to the design and monitoring of Fund-supported adjustment programs.
In addition to involvement in fiscal and monetary policymaking in Hungary and the United States, Kopits headed technical assistance missions on various economic policy issues to Austria, Belgium, Brazil, Costa Rica, Ecuador, Indonesia, Madagascar, Mexico, Peru, and Ukraine. Also, he was invited to give technical advice to the authorities of Argentina, China, Colombia, India, Israel, Korea, Nigeria, Thailand, United Kingdom and Venezuela.
Kopits has held visiting academic appointments at Bocconi, Budapest, Cape Town, Johns Hopkins, Siena, and Vienna universities. Currently, he is on the adjunct faculty of the Central European University. He authored more than fifty publications. Kopits holds a Ph.D. in economics from Georgetown University. He was an NDEA fellow, and was awarded the Heller Farkas and Popovics prizes for contributions in economics and finance. He is a member of the Hungarian Academy of Sciences.
At the European Parliament today, ECB President Trichet was asked whether Ireland could cope with both the sovereign and bank debt. RTE has reported as follows:
‘Following a suggestion from Fine Gael MEP Gay Mitchell at the European Parliament that it was impossible for Ireland to cope with both, Mr Trichet said Ireland had to regain credit worthiness.
‘My working assumption is that Ireland can do it, Ireland will do it,’ he said.
Speaking to the parliament’s economic and monetary affairs committee Mr Trichet said the rescue programme had been approved by the international community, not only the EU.
‘The decisions taken by Ireland over the past three years are there, and there has been a programme approved by the international community,’ he said.’
The dissenters from this view unfortunately include the sovereign bond market, which Ireland is scheduled to re-enter before the end of next year. At today’s close, the Irish ten-year bond offered 9.60 on the bid.
At this price, M. Trichet must regard these bonds as remarkably good value, and a suitable home for the ECB staff pension fund. The October 2020 issue has a coupon of 5% and has been trading recently about 72. It would be at least 100 if M. Trichet’s view was shared by the market. No distressed Eurozone member can credibly re-enter the market without selling at least some bonds at ten years or longer, and at rates below Spain’s ten-year, recently yielding about 5.15.
What precisely does M. Trichet expect to happen over the next 18 months to bring secondary market Irish yields down by the enormous amount implied by his expression of confidence? He clearly must believe that the market has got it wrong about Ireland. Does he believe things are going equally well in Greece, where the ten-year bond yields about 12.20 on the bid?
The Eurozone is in serious trouble unless his private view is more realistic.
Drawing on the international literature on the costs of default, newly elected Fine Gael TD Paschal Donohoe has written an interesting pamphlet on the option of a unilateral default (see here). Whether you agree with his conclusion or not, it is great to see people of Paschal’s calibre in the new Dáil.
The pamphlet is referenced in Daniel McConnell’s article today in the Sunday Independent (see here). Daniel comes out strongly for a default-now position. He draws heavily on the Prime Time programme on default in supporting this position. One of those quoted is Philip Lane. Not too surprisingly, the short snippets that could be used in the report do not do justice to Philip’s nuanced position. If you haven’t had the opportunity to view Philip’s interview, I think it is well worthwhile to view in full. While recognising the seriousness of the situation, I think he gets the balance just about right (full interview here).
I reproduce the full text of the ECF over the page (via 9th level Ireland blog). I really would encourage people commenting to read the document first as its not very long. Some of the argument has conflated the provisions with university funding, with some people complaining about the ECF because it limits academic numbers and some people supporting it basically for the same reason. The issue is not the resourcing but rather the process of hiring in universities and the stipulation in this document that all university hiring will need to be specifically approved by a small central government committee along with similar provisions about reallocating people across institutions and so on.