Table Of ContentFISCAL POLICY, TAXATION AND THE FINANCIAL SYSTEM
IN AN INCREASINGLY INTEGRATED EUROPE
FINANCIAL AND MONETARY POLICY STUDIES
Volume 22*
*Published on behalf of the Societe Universitaire Europeenne de
Recherches Financieres (SUERF), consisting of the lectures given
at the 16th Colloquium, held in Lisbon, Portugal, May 1991
The titles published in this series are listed at the end of this volume.
Fiseal Poliey, Taxation and the
Finaneial System in an Inereasingly
Integrated Europe
Edited by
DONALD E. FAIR and CHRISTIAN DE BOISSIEU
Published on behalf of the Societe Universitaire Europeenne de Recherches
Financieres (SUERF)
with contributions from:
Julian Alworth Pierre Llau
Graham Bishop Jose Tavares Moreira
Claudio Borio Giovanni Ravasio
Barry Bosworth Rafael Repullo
Jorge Braga de Macedo Beate Reszat
Jean-Claude Chouraqui Conrad Reuss
Hans-Peter FrtJhlich Jean-Jacques Rey
Jurgen von Hagen Luigi Spaventa
Egon Hlavatj Niels Thygesen
Helen Junz Matti Viren
Mervyn King Manfred Wegner
Erkki Koskela J.S.G. Wilson
Simon Kuipers Dirk Wolfson
..
SPRINGER. SCIENCE+BUSINESS MEDIA, B.V.
Library of Congress CataIogiDg-iD-PubUcatioD Data
Fiscal policy. taxat ion and the financia1 system ln an increasingiy
integrated Europe / edited by Donald E. Fair and Christian de
Boissieu ; wlth contributions from Ju1ian A1worth ••• [et a1.J.
p. c •• -- (Financia1 and monetary poliCY studies ; 22>
ISBN 978-94-010-5162-0 ISBN 978-94-011-2628-1 (eBook)
DOI 10.1007/978-94-011-2628-1
1. Boissieu. Chris~ian de. 2. Fiscal policy--Europe.
3. Taxation--Europe. 4. Monetary po1icy--Europe. 5. Fiscal poliCY
-United States. 6. Monetary policy--United States. 7. Fair. Donald
E. 1. Alworth. Julian. II. Series.
HJ1000.F57 1992
336.S·094--dc20 91-29675
ISBN 978-94-010-5162-0
Printed on acid-free paper
AII Rights Reserved
© 1992 by Springer Science+Business Media Dordrecht
Originally published by Kluwer Academic Publishers in 1992
Softcover reprint of the hardcover Ist edition 1992
No part of the material protected by this copyright notice may be reproduced or utilized in any
form or by any means, electronic or mechanical including photocopying, recording or by any
information storage and retrieval system, without written permission from the copyright owner.
Contents
Preface IX
About the Editors and Authors Xl
Part A
OPENING ADDRESSES
Chapter I Introduction
by Niels Thygesen 3
Chapter II Monetary and Fiscal Policy in Portugal: A New
Approach to an Old Challenge
by Jose A. Tavares Moreira 9
Chapter III Quelques reflexions sur Ie processus de transition
vers l'union economique et monetaire
by Giovanni Ravasio 19
Chapter IV On Policies Toward Saving
by Mervyn A. King 29
Part B
PRIVATE SAVINGS AND THE TAXATION OF
INCOME FROM CAPITAL
Chapter V Tax Policy and Private Saving in the 1980s: The
United States Experience
by Barry Bosworth 47
Chapter VI The Linkages Between Taxation, Private Saving
vi Contents
Decisions and Financial Intermediation: Some International
Comparisons
by Julian S. Alworth and Claudio E. V. Borio 69
a
Chapter VII Fiscalite et epargne des menages en France l'heure
de l'integration europeenne
by Pierre Llau 105
Chapter VIII Household Saving, Interest Rates, Inflation and
Taxation: Some Cross-Country Evidence
by Erkki Koskela and Matti Viren 139
Part C
IMBALANCES IN PUBLIC SECTOR BUDGETS AND
THEIR IMPACT ON FINANCIAL SYSTEMS
Chapter IX Imbalances in Public Sector Deficits: The Dutch
Experience
by Simon K. Kuipers 165
Chapter X The Italian Public Debt Problem
by Luigi Spaventa 185
Chapter XI The Ee's Public Debt Disease: Discipline with Credit
Spreads and Cure with Price Stability
by Graham Bishop 207
Chapter XII Financing Budget Deficits by Seigniorage and
Implicit Taxation: The Cases of Spain and Portugal
by Rafael Repullo 235
Chapter XIII Note on UK Experience with a Budget Surplus and
Implications for Financial Markets
by J. S. G. Wilson 255
Part D
INTERNATIONAL RESOURCE TRANSFERS AND
THE RESPECTIVE ROLES OF GOVERNMENTS
AND PRIVATE CAPITAL FLOWS
Chapter XIV Labour Mobility, Fiscal Solidarity and the
Contents vii
Exchange Rate Regime: A Parable of European Union and
Cohesion
by Jorge Braga de Macedo 263
Chapter XV International Resource Transfers and the Respective
Roles of Governments and Private Capital Flows: Economic and
Political Reforms in Eastern Europe
by Helen B. Junz 281
Chapter XVI German Economic and Monetary Union: Impact on
Private and Public Capital Flows
by Hans-Peter Frohlich 291
Chapter XVII Synergy between Public Transfer and Direct
Investments in the Reconstruction of Central Europe
by Conrad Reuss 307
Chapter XVIII System Conditions for the Promotion of Foreign
Capital Participation in the Czech and Slovak Federative Republic
by Egon Hlavary 325
Part E
THE POLICY MIX, MONETARY POLICY, AND
FINANCIAL STABILITY IN THE TRANSITION
TO ECONOMIC AND MONETARY UNION
Chapter XIX Fiscal Arrangements in a Monetary Union:
Evidence from the US
by Jilrgen von Hagen 337
Chapter XX The Scope for Fiscal Policy in the European
Community
by Dirk J. Wolfson 361
Chapter XXI La formulation de la politique mollt!taire dans Ie
cadre de l'integration financiere en Europe
by Jean-Claude Chouraqui 383
Chapter XXII The First Stage Towards Economic and Monetary
Union
m
~~~~~
viii Contents
Chapter XXIII European Monetary Integration and National
Budgetary Policies: New Rules for an Old Game?
by Beate Reszat 411
Part F
CONCLUDING ADDRESS
Chapter XXIV General Report on the Colloquium
by Manfred Wegner 429
Preface
The papers collected in this volume are those presented at the sixteenth
Colloquium arranged by the Societe Universitaire Europeenne de Re
cherches Financieres (SUERF), which took place in Lisbon in May 1991.
The Society is supported by a large number of central banks and commer
cial banks, by other financial and business institutions, and by personal
subscriptions from academics and others interested in monetary and financial
problems. Since its establishment in 1963, it has developed as a forum for
the exchange of information, research results and ideas among academics
and practitioners in these fields, including central bank officials and civil
servants responsible for formulating and applying monetary and financial
policies, national and international.
A major activity of SUERF is to organise and conduct Colloquia on
subjects of topical interest to its members. The titles, places and dates of
previous Colloquia for which volumes of the collected papers were published
are noted on the last page of this volume. Volumes were not produced for
Colloquia held at Tarragona, Spain in October 1970 under the title 'Monetary
Policy and New Developments in Banking' and at Strasbourg, France in
January 1972 under the title 'Aspects of European Monetary Union'.
In choosing 'Fiscal Policy, Taxation and the Financial System in an Increas
ingly Integrated Europe' as the general theme for the Lisbon Colloquium, the
SUERF Council was concerned with three major challenges now confronting
European policy-makers and financial systems: first, to preserve and
strengthen policy coordination between the countries participating in the
European Monetary System through successful operation of Stage One in
the progress towards Economic and Monetary Union (EMU); secondly, to
design the future structure of the EMU for which preparations began with the
Intergovernmental Conference in December 1990; and, thirdly, to implement
constructive economic and financial responses to the major economic and
political reforms in Eastern Europe.
The Colloquium was attended by 170 participants, representing a wide
range of financial activities and academic teaching and research in the finan
cial field. The Chairman of the Colloquium as a whole was the President of
ix
x Preface
SUERF, Professor Niels Thygesen. After his introductory remarks, opening
addresses were given by Mr Jose A. Tavares Moreira, Governor of the Bank
of Portugal, Mr Giovanni Ravasio, Director General for Economic and
Financial Affairs, Commission of the European Communities and by Pro
fessor Mervyn A. King, Executive Director, Bank of England. These contri
butions appear in Part A of this volume, Chapters I-IV.
The contributed papers that followed had been distributed beforehand and
were discussed in four separate Commission meeting simultaneously. The
themes of the Commissions were: 'Private Savings and the Taxation of
Income From Capital', chaired by Professor Christian de Boissieu and Pro
fessor Dr. Wietze Eizenga (Part B, Chapters V-VIII); 'Imbalances in Public
Sector Budgets and their Impact on Financial Systems' chaired by Mr Jose
Perez Fernandez and Professor J. S. G. Wilson (Part C, Chapters IX-XIII);
'International Resource Transfers and the Respective Roles of Governments
and Private Capital Flows' chaired by Professor Dr. Hans Bosman and
Professor Dr. Georg Winckler (Part 0, Chapters XIV-XVIII); and 'The
Policy Mix, Monetary Policy, and Financial Stability in the Transition to
Economic and Monetary Union' chaired by Professor Franco Bruni and Dr
Alois Schwietert (Part E, Chapters XIX-XXIII).
The Colloquium reassembled for a final plenary session to which Dr.
Manfred Wegner gave his reflections on the Colloquium as a whole (Part F,
Chapter XXIV).
In some cases, minor changes have been made to the papers before publi
cation.
The Colloquium was supported by the local financial community - a
generous donation was made by the Portuguese Banks Association and the
Bank of Portugal.
The Colloquium was most successful, not only in the quality of the papers
presented but also in the opportunity it provided for contacts and discussions
between experts from many different countries and financial institutions.
Particular thanks were given to Professor Hans Bosman, the Secretary
General, and to Miss Annelies Vugs, the Executive Secretary, for their
excellent organisation and every-ready assistance.
14 July 91 DONALD E. FAIR
CHRISTIAN de BOISSIEU
