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European public finances and the Great Recession: France, Germany, Ireland, Italy, Spain and the United Kingdom compared

Journal article | Fiscal Studies, Vol. 36, No. 4, December 2015

This new special edition of the journal Fiscal Studies examines public finances through the Great Recession – for France, Germany, Ireland, Italy, Spain and the United Kingdom.

This introduction to the issue compares economic trends over the financial crisis, and the tax and benefit reforms implemented in response, across six EU countries. Countries where the crisis led to a relatively greater increase in public spending than a decline in tax revenues – in particular, France and Italy – are found to have implemented consolidations that are more reliant on tax increases than spending cuts. While in Italy households with children have lost less from tax and benefit reforms than pensioner households, the reverse is true in Ireland and the United Kingdom. The pattern of cuts to public services also varies: France, Ireland and the UK chose to protect spending on health and schools from cuts, while Italy and Spain chose to cut spending on these services relatively deeply. One clear improvement has been the introduction of greater independence and transparency in the production of economic and fiscal forecasts. Unfortunately, in many cases, the fiscal response to the crisis missed opportunities to improve the overall efficiency of the tax system.

This introduction can be downloaded as a pdf below. This version and the associated observation are accurate. The original uncorrected version is available here and full details of the corrections are available here.  

 

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Journal article | Fiscal Studies, Vol. 36, No. 4, December 2015
Ireland was one of the countries most negatively affected by the Great Recession. GDP fell by 13 per cent and unemployment rates increased sharply. The recession uncovered fundamental flaws in the Irish economy such as an over-reliance on the construction sector for employment and taxes and a move ...
Journal article | Fiscal Studies, Vol. 36, No. 4, December 2015
France was modestly hit by the financial crisis compared with its neighbours but the recovery has been particularly slow. The shock to the public finances was nonetheless significant, and came on top of an already weak pre-crisis fiscal position. Part of this shock is expected to be permanent and ...
Journal article | Fiscal Studies, Vol. 36, No. 4, December 2015
The German experience of the financial crisis was very different from that of most other European countries.
Journal article | Fiscal Studies, Vol. 36, No. 4, December 2015
This article analyses the financial crisis of 2008 and associated recession caused significant which permanent damage to the UK's public finances.
Journal article | Fiscal Studies, Vol. 36, No. 4, December 2015
Spain's public finances have been under significant stress during the financial crisis, despite pre-crisis fiscal surpluses and low levels of public debt. The impact of the crisis and an initial phase of countercyclical activism exacerbated the existing (structural) fiscal vulnerabilities.
Journal article | Fiscal Studies, Vol. 36, No. 4, December 2015
Italy experienced a double-dip Great Recession: after the start of the global financial crisis, Italy had a second serious recession in 2011 as a result of the sovereign debt crisis. The reaction of Italian governments was minimal at the beginning but more serious action has been taken to address ...