This share prices have a 15 minute delay and are shown in the local time of the market in which the quote is displayed.
Current energy crisis and the transition to a carbon neutral economy: Same challenges?
The OECD ´s “Tax policy Reforms 2022” report provides comparative information on tax reforms and tax policy developments across OECD countries. This year includes a special feature that examines government responses to rising energy prices and offers some policy recommendations. In this regard the key message is that governments will need to shift from policies that directly seek to limit price increases to those that cushion their impact through targeted income support restricting the number of beneficiaries while limiting effects on government budgets.
Summary of the main take aways from the report:
- More developed fiscal and welfare systems were better able to adopt target support measures to “at-risk” populations more vulnerable to raising energy prices.
- Trends by tax category: Personal income taxes and social security contributions were reduced in most countries to support low-income households; in the Corporate income tax many countries increased the generosity of tax incentives to stimulate investment and innovation, particularly to promote environmental sustainability; a common government response has been to temporarily reduce fuel and electricity excises; a small number of European countries have also announced plans to implement windfall profits taxes on energy companies to support the cost of the measures they have introduced.
- Significant government budget impact: OECD estimates that the aggregate fiscal cost of measures provided since October 2021 to December 2022 amounts to a total of USD 246 billion. Out of which 66% have focused largely on non-targeted price control measures, which tends to support rather than curb demand contributing to raise fossil fuel subsidies. The remaining 34% has been devoted to income support measures – i.e., transfers to households and businesses.
- OECD recommendation going forward: Governments will need to shift from policies that directly seek to limit price increases to those that cushion their impact through targeted income support (restricting the benefit of the measures to certain specific categories of energy consumers based on some criteria, such as energy consumption, income…). This approach will ensure that the support provided is fair and effective, while limiting its effects on government budgets and maintaining price signals to encourage the transition to carbon neutrality.
Filter results
According to @McKinsey, banks must prepare for a new growth curve. Strategic precision —the ability to combine technology, capital discipline, and deep customer insight— will distinguish the leaders from the laggards.
According to Kristalina Georgeva IMF Managing Director, lifting growth requires three things: one, regulatory housecleaning to unleash private enterprise; two, deeper regional integration; and three, preparedness to harness AI.
According to The European House – Ambrosetti, the European Union has an opportunity to boost competitiveness and growth by simplifying regulatory and supervisory frameworks, particularly in the areas of sustainability and the financial sector.
According to Ramón Casilda Béjar, Spain, in today’s complex geopolitical landscape, has the opportunity to strengthen its role as a bridge and connecting country between Ibero-America and the European Union, revitalizing investment flows in both directions.
According to @ECB, in moments of acute stress, the public often turns to physical currency as a reliable store of value and a resilient means of payment, underscoring the crucial role it plays above and beyond everyday transactional convenience
According to Juan S. Mora-Sanguinetti, in Spain a 10% increase in regulatory volume leads to a 0.5% drop in employment in companies with fewer than 10 employees.
According to Hélène Rey “In a world where stablecoins, particularly those pegged to the dollar, become an important global payment tool, we must brace ourselves for substantial consequences”.
@judith_arnal proposes reforms for the EU to advance regulatory simplification, starting with consensus on its meaning, with competitiveness as a pillar, plus coordination mechanisms and a governance rethink.
According to @iee_org, Spain has one of the most demanding tax environments for businesses within the European and international context, which may have significant implications for competitiveness, foreign investment attraction, and business expansion.
According to Christine Lagarde for the euro to gain in status, Europe must take decisive steps by completing the single market, reducing regulatory burdens and building a robust capital markets union.
According to the Bank of Spain, in a context of strong growth in transactions and prices, the conditions under which new mortgage loans are granted currently show no signs of easing in lending standards.
McKinsey notes that European private capital is half the size of the U.S. and must play a key role in boosting competitiveness, by driving innovation, scaling firms, and mobilizing the investment needed to close the gap with other regions.