Atlantic Sentinel

Tag: Fiscal Issues

  • Dutch Government’s Budget and Climate Deal, Explained

    Thierry Breton Mark Rutte
    European commissioner Thierry Breton is welcomed by Dutch prime minister Mark Rutte in his office in The Hague, September 9, 2022 (European Commission)

    Mark Rutte’s coalition government in the Netherlands has agreed various spending reforms and additional climate policies to keep its budget deficit under 3 percent and achieve a 55-percent reduction in greenhouse gas emissions by 2030.

    The four ruling parties — two liberal, two Christian democrat — were in a rush to do a deal before parliament goes on summer recess.

    Negotiations resulted in a delay in child-care reform, an expansion of hydrogen and solar power, and higher subsidies for home insulation and secondhand electric cars, paid for in part by raising taxes on coal use and carbon dioxide (CO₂) emissions.

    Rutte’s VVD (of which I am a member) and the Christian Democratic Appeal (CDA) blocked higher taxes on petrol and meat. (more…)

  • Dutch Parties in Rush to Do Budget Deal

    Mark Rutte
    Dutch prime minister Mark Rutte arrives to a meeting of European leaders in Brussels, December 15, 2022 (European Council)

    The ruling parties in the Netherlands are in a rush to do a budget deal before parliament goes on summer recess.

    In addition to spending, the four parties — two liberal, two Christian democrat — need to agree on asylum reform, more ambitious climate legislation and a resolution to the Netherlands’ farm crisis.

    The issues are connected. Raising climate-related taxes, for example on diesel or meat, could stave off spending cuts. Reducing ammonia pollution from farms unlocks permits needed to build homes for refugees. (more…)

  • Italy Shows Goodwill to EU with Last-Minute Tax Changes

    Siena Italy bartender
    Bartender in Siena, Italy, August 5, 2020 (Unsplash/Gabriella Clare Marino)

    Italy’s new right-wing government has backed away from a plan to let shops refuse card payments under €60.

    The country’s previous government, led by former European Central Bank chief Mario Draghi, required companies to accept all card payments in an attempt to fight tax evasion. Businesses that refused were fined €30 per transaction plus 4 percent of the amount.

    The policy was one of the EU’s conditions for releasing COVID-19 recovery funds, of which Italy is the largest recipient. (more…)

  • Netherlands Should Consider Euro Exit: Former Central Banker

    Lex Hoogduin
    Former Dutch central banker Lex Hoogduin speaks at the European Systemic Risk Board conference in Frankfurt, September 22, 2017 (ECB)

    The Netherlands should consider exiting the euro, argues Lex Hoogduin, a former director of the country’s central bank.

    Hoogduin, now a professor of financial markets at Groningen University, points out in an interview with Wynia’s Week that the nineteen countries that share the euro have broken almost all the rules they agreed in the 1990s, when the currency was introduced. High inflation and low interest rates — to help France and Italy service their debts — threaten Dutch trade and €1.4 trillion in Dutch pension assets. (more…)

  • Dutch Spend €16 Billion to Offset Higher Living Costs

    Mark Rutte
    Dutch prime minister Mark Rutte answers questions from members of the European Parliament in Strasbourg, July 5, 2016 (European Parliament)

    The Dutch government is due to unveil €16 billion in new spending (worth 2 percent of GDP) to help low- and middle-income earners pay record-high energy and grocery bills.

    A package of benefits, tax cuts and tax increases Prime Minister Mark Rutte’s four-party coalition agreed was promptly leaked to various media. They will be officially announced in next year’s budget on September 20.

    The government already spent €6.5 billion this year to lower energy and fuel taxes, and to give low-income households a bonus of €1,300. Those measures would be repeated.

    The Dutch pay the highest electricity and gas prices in Europe, and the highest fuel prices after the Nordic countries and Greece.

    With inflation reaching 13.6 percent in August, a postwar record, and the Netherlands’ Central Bureau of Statistics projecting that 1.2 out of 17.7 million people could fall below the poverty line, Rutte’s coalition was under pressure to do more.

    The policies leaked on Wednesday should give the lowest incomes between €3,000 and €4,000 in support next year.

    Here is an overview, including who’s paying for it. (more…)

  • Why Congress Let Biden’s Child Benefits Lapse

    Washington DC
    Skyline of Washington DC with the United States Capitol in the distance, September 28, 2017 (Ted Eytan)

    A year ago, I wrote that the child benefits Joe Biden snuck into his $1.9 trillion coronavirus recovery program might outlive the pandemic. Once American parents had accustomed to receiving monthly cheques of $250 or $300 per child, I figured it would be hard for Congress to let the program lapse.

    But that’s what they did. (more…)

  • Netherlands’ Kaag Disappoints Liberal Well-Wishers

    Sigrid Kaag
    Peter Maurer, president of the International Committee of the Red Cross, leads then-Dutch trade and international development minister Sigrid Kaag up the stairs of the Royal Tropical Institute in Amsterdam for a conference on mental health in humanitarian crises, October 7, 2019 (MFA/Martijn Beekman)

    When the pro-European Sigrid Kaag became the Dutch finance minister in January, hopes were high that she would take a more relaxed view to debts and deficits in the EU.

    AFP reported that Kaag was “tipped to smooth ties with debt-hit Southern European states that have previously been lectured by the Dutch to cut deficits.”

    EUobserver knew it was “widely expected” Kaag would strike “a more dovish tone” than her Christian democratic predecessor, Wopke Hoekstra.

    The Financial Times predicted that the “polyglot” Kaag — who led her left-liberal party D66 to a “surprise surge” in the polls despite receiving much “opprobrium” from the far right — would be “less hostile on topics such as revamping budgetary rules, joint EU borrowing and fiscal risk-sharing.”

    Her presence around the Eurogroup table should help rebuild trust with southern capitals that often found themselves in Hoekstra’s line of fire.

    It was wishful thinking. (more…)

  • America’s $1 Trillion Infrastructure Bill, Explained

    Arthur Ravenel Jr Bridge South Carolina
    Arthur Ravenel Jr Bridge outside Charleston, South Carolina, December 2, 2017 (Unsplash/David Martin)

    The United States Senate is expected to pass a $1 trillion infrastructure bill this week with funding for everything from broadband Internet to road safety.

    The bill, which is believed to have the support of enough Republicans to overcome a forty-senator filibuster, falls short of the $2 trillion President Joe Biden had proposed to spend on (green) infrastructure over four years.

    The compromise bill has $550 billion in new spending. The rest consists of existing infrastructure funds which are either being diverted or renewed.

    Unlike Biden’s $2 trillion proposal, which would have been funded by corporate tax increases, the compromise version draws money from various sources, including around $200 billion left over from COVID-19 relief programs. (more…)

  • Child Benefits Could Outlive Biden’s COVID-19 Stimulus

    Joe Biden
    Former American vice president Joe Biden campaigns in Des Moines, Iowa, August 8, 2019 (Gage Skidmore)

    The United States Senate has approved President Joe Biden’s $1.9 trillion coronavirus recovery plan, more than twice the size of Barack Obama’s 2009 stimulus.

    With the exception of a $15 hourly minimum wage, the soon-to-be-law includes nearly all the provisions Biden had called for, including additional spending on health care, extended unemployment insurance (if cut by $100 per week from the original version) and rental assistance. For detail, check out my post about the bill from January.

    The part I want to focus on here is a child allowance that ranges from $250 to $300 per month per child. (more…)

  • Biden Plans $1.9 Trillion Coronavirus Rescue Program

    Joe Biden
    Former American vice president Joe Biden campaigns in Greenville, South Carolina, August 30, 2019 (Biden For President)

    Joe Biden plans to ask Congress for $1.9 trillion in the first weeks of his presidency to cope with the effects of the coronavirus pandemic in the United States.

    Matthew Yglesias and Punchbowl News, a new Capitol Hill-focused newsletter, have the details:

    • $400 billion for health, including $50 billion for testing, $30 billion for protective gear and $20 billion for vaccinations.
    • Hire 100,000 public health workers.
    • A mandatory paid sick leave program.
    • $1,400 cheques to all Americans on top of the $600 cheques sent in December.
    • Extend federal unemployment benefits at $400 per week.
    • Extend the eviction moratorium.
    • $30 billion in rental assistance.
    • Raise the federal minimum wage to $15 per hour.
    • Raise the child tax credit to as much $3,600 per year for families with young children.
    • $350 billion in financial relief for local, tribal and state governments. (more…)

  • EU “Government Shutdown” Looms

    Berlaymont Brussels Belgium
    Night falls on the Berlaymont, seat of the European Commission, in Brussels, Belgium (Shutterstock/Jasmin Zurijeta)

    The EU could face its own version of a government shutdown in January if Hungary and Poland veto the bloc’s seven-year budget and coronavirus recovery fund, worth a combined €1.8 trillion, at this week’s European Council.

    The far-right governments of the two countries oppose the introduction of a rule-of-law conditionality for EU subsidies. Hungarian and Polish voters, and other European countries, favor the proposal.

    If leaders don’t find a solution this Thursday and Friday, the European Parliament would not have time to ratify the spending plans before the new year. The council isn’t due to meet again until March. (more…)

  • Spain Proposes Major Tax Increases to Fund 2021 Budget

    Spain’s left-wing government has proposed raising public spending by 10 percent next year to cope with the effects of coronavirus. If approved — the ruling parties do not have a stable majority in Congress — it would be the biggest budget in Spanish history.

    Health spending would rise 150 percent, or €3.1 billion. In addition, €2.4 billion would be set aside to prop up primary care and buy vaccines. Another €700 million, drawn from the EU’s €750 billion coronavirus recovery fund, would go to elderly care.

    Spain qualifies for around €70 billion in EU grants and €70 billion in loans. It is not expected to make use of the loans, given that it can still borrow affordably on its own.

    To pay for the extra spending, the coalition government also plans to raise taxes. (more…)

  • Dutch King Announces Borrowing, Investments to Weather COVID-19

    The Netherlands’ ruling center-right coalition unveiled an expansionary budget on Tuesday, when King Willem-Alexander read out his annual speech from the throne to set out the government’s priorities for the next fiscal year.

    Whereas the Dutch government, then also led by Mark Rutte, raised taxes and cut public spending during the last economic crisis to keep its budget deficit under the EU’s 3-percent ceiling, it now argues against austerity and is borrowing the equivalent of 7.2 percent of GDP (down from an earlier estimate of 8.7 percent).

    Rutte argues the savings made in previous years allow the government to avoid cuts this time.

    The Dutch economy is projected to shrink 5 percent this year as a result of COVID-19 and grow 3.5 percent next year, when unemployment would reach 545,000, or almost 6 percent. Debt as a share of GDP is projected to rise from 49 to 61 percent. (more…)

  • What’s in France’s €100 Billion Stimulus

    Emmanuel Macron
    French president Emmanuel Macron chairs a meeting in the Elysée Palace in Paris, August 27 (Elysée/Philippe Servent)

    France has unveiled a €100 billion stimulus program, worth 4 percent of GDP over two years, to help its economy recover from the effects of COVID-19.

    The money is split almost equally between support for businesses, investments in the green economy, and health and social programs. It comes on top of the €460 billion France has spent on exemptions from social charges, furlough subsidies and soft loans to keep businesses afloat.

    France is counting on the EU to provide 40 percent of the money from its €750 billion recovery fund. (more…)

  • Dutch Extend COVID Aid for Businesses

    The Hague Netherlands
    Dutch government offices and parliament buildings in The Hague (iStock/Fotolupa)

    The Dutch government has extended support for companies and self-employed workers struggling as a result of COVID-19 until July 2021, although some policies are becoming less generous.

    The thinking, reports the national broadcaster NOS, is that firms shouldn’t be subsidized if they aren’t viable long term and workers in sectors with job losses should be coaxed into reskilling.

    The measures will cost almost €39 billion this year. The Dutch economy is projected to shrink 6.4 percent. (more…)