The Fiscal Crisis Down Below

Japan s Fiscal Crisis Comes of Age

So, Japan had a fiscal real estate crisis back in the late '80s.

(b) That domestic commitment, fiscal and non fiscal resources hold primacy of place in crisis responses, but should not be an excuse for lack of international support

The Palestinian Authority's fiscal situation is also of immediate concern, and urgent action will be required before the end of the year to address the anticipated fiscal crisis.

US and Chinese leaders have fought the crisis with not only massive fiscal stimulus, but also deep intervention into credit markets. Such extraordinary fiscal largesse, all at taxpayers expense, cannot continue indefinitely.

A fiscal crisis in the United States (owing to further political fights over the debt ceiling and another government shutdown).

To be sure, the fiscal stance improved in many Latin American economies in the years leading up to 2007, so countries like Chile were able to mount a strong anti crisis fiscal response. But, as a 2013 Inter American Development Bank (IADB) report makes clear, the fiscal stimulus was not always withdrawn in time when the crisis abated, so the fiscal position across the region today is weaker than it was in 2007.

However, despite this positive picture, a climate of protracted social and humanitarian crisis endured through the year, punctuated by an intensification of the conflict, ongoing barrier construction and persistent fiscal crisis.

Despite these initial steps, a fiscal crisis within the Palestinian Authority required emergency budget support towards the end of the year.

But the stimulus measures transformed a banking crisis into a fiscal and sovereign debt crisis. From 2010 onwards, governments started to raise taxes and cut spending in response to growing fears of sovereign default.

The simplistic diagnosis of Europe s woes that the crisis countries were living beyond their means is clearly at least partly wrong. Spain and Ireland had fiscal surpluses and low debt GDP ratios before the crisis.

The case for returning fiscal responsibility to national authorities is also strong and not only because centralized fiscal authority has proved to be so inefficient. With citizens of distressed countries bearing the fiscal burden of the crisis, the enduring presumption that they will not act responsibly is patronizing, at best.

We're there in 20 years. We have lots and lots of time to avoid that crisis, and the fiscal cliff was just one more attempt at trying to force the two sides to resolve the crisis.

Fiscal Challenges and Fiscal Follies

A strong fiscal framework is indispensable to achieve this, and protects countries from contagion. But the crisis experience suggests that, in times of extreme market tensions, even a sound initial fiscal position may not offer absolute protection from spillovers.

The global financial crisis exposed the eurozone s underlying flaw. Meanwhile, international bodies, including the International Monetary Fund and the G 20, encouraged struggling countries to implement loose fiscal policies, claiming that they were needed to overcome the crisis.

The international community should focus its attention on the recommendations of the Quartet's Special Envoy, Mr. Wolfensohn, in particular the recommendations to help the Palestinian Authority overcome its fiscal crisis and achieve fiscal stabilization, as well as to implement quick impact economic programmes.

But only those financial institutions that subject themselves to these rules would be able to rely on the support of the public authorities in case of a crisis. This would ensure both fiscal stability and fiscal innovation in contrast to the present situation, in which no one obeyed any rules and, when crisis erupted, taxpayers had to come to the rescue.

The Supreme Court unanimously agreed there had been discrimination but that addressing the fiscal crisis was a pressing and substantial objective and that the measure was done to avert a serious financial crisis which justified the infringement of section 15.

People say we should call it the fiscal slope, or we should call it an austerity crisis, but then other people say, no, that's even more partisan.

Eurobonds plus fiscal rules this formula is the euro s best hope for salvation. Unfortunately, another crisis or two might be necessary before European leaders consider it seriously.

But that is not true of the US or the UK, which both have large fiscal deficits. And most countries were adhering to reasonably tight fiscal discipline before the crisis of 2008 undermined their banks, cut their tax revenues, and forced up their sovereign debt.

Likewise, the unemployment rate has fallen throughout the crisis, reaching 5.2 , the lowest level since reunification. And the German government s commitment to fiscal consolidation enabled it to achieve a surplus last year by 2018, the fiscal surplus is expected to amount to 1.5 of GDP.

After emerging from the crisis, indicators show a sustained growth in the economy, and a surplus in the fiscal external accounts, together with a recovery in national reserves.

The fiscal balances of the G 20 economies will deteriorate dramatically as a result of the crisis. Deficits will improve somewhat as economies recover and support measures are withdrawn.

Europe as a whole is not in bad fiscal shape its debt to GDP ratio compares favorably with that of the United States. If each US state were totally responsible for its own budget, including paying all unemployment benefits, America, too, would be in fiscal crisis.

In the current crisis, China, India, and certain other emerging market countries are coping fairly well. These countries all had strong external balance sheets and ample room for fiscal maneuver before the crisis, which allowed them to apply countercyclical policies to combat external shocks.

The current crisis has, however, also shown that the Council of Finance Ministers (Ecofin) is unable to assert such control over EU member states fiscal policies. The direct leadership of heads of state and government is needed, at least in these times of extreme crisis.

Fiscal Follies

Fiscal Year

Fiscal yeara

What's fiscal ?

And here was the clincher By committing themselves to fiscal tightening, finance ministers gave themselves scope for some fiscal loosening. Proclaiming fiscal virtue enabled them to practice fiscal vice.

Spain was not in an enviable position. The rapid deterioration of fiscal position after the crisis made any substantial countercyclical response impossible, while regulatory constraints limited the economy s structural flexibility.

We could perhaps all be happy working fewer hours if the decline reflected gradual social progress. But we are not happy with unemployment that results from a sudden fiscal crisis.

fiscal year 2000 2001 to the fiscal year 2002 2003 (table 5).

Finally, once the crisis erupted, the fiscal consequences of bailing out too big to fail financial institutions contributed to rapid public debt unsustainability, which threatens to boomerang on the banking sector.

The failure of Western European governments to even begin to think about how to address the coming fiscal crisis of the social insurance state as a result of their aging populations

Europe s Fiscal Wormhole

America s Fiscal Isolationism

Fiscal Apocalypse Now

Germany s Fiscal Follies

Current fiscal year

Last fiscal year