Monthly Archive: May 2012

May 31

The “Pasty Tax” and VAT on Food in the UK

The news that the British government has decided to rescind its ill-conceived “pasty tax” – the 20% VAT rate levied on hot pasties and other hot food served by bakers introduced in the budget eight weeks ago – comes as a welcome relief, not just for Cornish pasty manufacturers, but more widely for the British …

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May 20

The Euro and the Spanish banking crisis

The origins of the Spanish banking crisis date back to the fateful decision taken by the Spanish Government in 1999 to surrender the peseta and adopt the euro. For a time, it seemed as though the euro would bring prosperity to the Iberian peninsular, as interest rates fell to German levels and property prices soared, …

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May 10

The German Finance Minister proposes a solution to the Eurozone crisis

As the Eurozone crisis deepens, the German Finance Minister, Wolfgang Schäuble, has come up with an interesting proposal to help resolve it. He has suggested that the real wages of German workers should be significantly increased. An increase in real wages would increase their spending power, and hence the level of imports that German consumers …

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May 08

The President-Elect of France as a German Satrap

It has not taken long for François Hollande to receive a hard lesson on the limits of French presidential power in 2012. Less than 24 hours after being elected President of France, M. Hollande’s eminently sensible proposal to re-examine the terms of the Eurozone fiscal compact negotiated by his predecessor has been rejected out of …

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May 07

François Hollande elected President of France – an end to austerity?

Elections in France and Greece on May 6 saw voters reject policies of austerity in both countries. In France, President-elect Hollande has stated that he will seek to amend the Eurozone’s fiscal compact, under which euro members have committed themselves to reducing their national budget deficits to no more than 0.5% of GDP – very …

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