Shining a light on public overspending in Europe
Diego Zuluaga // 09.11.2015
On Monday, our French partner Institut Economique Molinari released its latest study, shedding late on out-of-control public expenditures across the European Union. It does this in an original way, by indicating how early in the year European treasuries run out of tax revenue and begin to borrow to finance current spending. The idea is modelled on the now famous Tax Freedom Day reports, which show the day of the year when the average taxpayer stops working to pay her taxes and starts working for herself.
Authored by Cécile Philippe and Nicolas Marques, the IEM study includes a useful calendar outlining when each of the EU-28 exhaust their tax resources. The bottom line: over half of Member States start borrowing by 1st December, with Cyprus, Portugal and Spain running out of own resources by 30th October. And only Estonia, Lithuania, Germany and Denmark manage to make it to the end of the year without borrowing.
The study (in French) is well worth a read. You can find it here.
Diego Zuluaga is Deputy Director of EPICENTER.
EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).