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International Monetary Fund
This paper provides an assessment of Greece’s competitiveness, export performance, and national saving and investment. It examines the Greek tax ratio and structure, and places them in the EU context. It also reviews the design of the various tax categories, and identifies the scope for further simplifying the tax system and broadening the tax base. The paper discusses that it would be desirable to raise the tax ratio through expanding the tax base before considering raising tax rates.
International Monetary Fund
This 2011 Article IV Consultation highlights that Macedonia is poised to achieve low but positive growth under the baseline scenario of a shallow recession in the euro area. Under a downside scenario, growth would be weaker, and external financing pressures could arise. In the near term, the government would need to reduce expenditure growth to meet the 2012 deficit target. A key longer-term challenge would be to reconcile the competing objectives of higher public investment and increases in pensions and public wages while preserving low public debt and low taxes.
International Monetary Fund
This paper discusses key findings of the Second and Third Reviews under the Stand-By Arrangement for Romania. Most end-December 2009 quantitative performance criteria were met. The ceiling on the accumulation of domestic arrears at end-September was missed, and preliminary data suggest the end-December target was also missed. The end-2009 inflation rate was slightly higher than the central bank target, but remained well within the inner band of the inflation consultation mechanism. The authorities have agreed to reschedule the benchmark for end-June 2010. IMF staff supports the waiver requested by the authorities.
International Monetary Fund. Fiscal Affairs Dept.
This 2004 Article IV Consultation on Romania highlights commendable progress under its home-grown IMF-supported program. Economic activity is picking up after a four-year slump, inflation remains low, the financial sector is stable, and the fiscal and external positions are improving. The 2014 budget aims to protect the gains under the program, continue the downward debt-to-GDP trajectory, and advance the reform agenda. Debt has fallen considerably owing to completion of a large part of the debt-land swap, but remains high. The authorities have taken welcome steps to strengthen the nonbank financial institutions supervisory framework.
International Monetary Fund
Bulgaria’s potential output growth in future could be markedly lower, and it may take considerable time for the excess labor and resources to be absorbed by other sectors, in particular by the export sector. This suggests that the natural level of rate of unemployment will rise and remain higher, and the full employment level is likely to decline. There is a requirement of significant improvements in labor productivity and competitiveness, as well as reforms to further improve labor mobility and participation.
International Monetary Fund. Research Dept.
This paper assesses alternative auction techniques for pricing and allocating various financial instruments, such as government securities, central bank refinance credit, and foreign exchange. Before recommending appropriate formats for auctioning these items, the paper discusses basic auction formats, assessing the advantages and disadvantages of each, based on the existing, mostly theoretical, literature. It is noted that auction techniques can be usefully employed for a broad range of items and that their application is of particular relevance to the impetus in many parts of the world toward establishing market-oriented economies.
Dilyana Dimova
The labor share in Europe has been on a downward trend. This paper finds that the decline is concentrated in manufacture and among low- to mid-skilled workers. The shifting nature of employment away from full-time jobs and a rollback of employment protection, unemployment benefits and unemployment benefits have been the main contributors. Technology and globalization hurt sectors where jobs are routinizable but helped others that require specialized skills. High-skilled professionals gained labor share driven by productivity aided by flexible work environments, while low- and mid-skilled workers lost labor share owing to globalization and the erosion of labor market safety nets.
Ms. Katerina Smídková, Jan Babecky, and Mr. Ales Bulir
The Great Recession affected export and import patterns in our sample countries, and these changes, coupled with a more volatile external environment, have profound impact on our estimates of real exchange rate misalignments and projections of sustainable real exchange rates. We find that real misalignments in several countries with pegged exchange rates and excessive external liabilities widened relative to earlier estimates. While countries with balanced net trade positions are expected to continue to experience appreciation during 2010-2014, several currencies are likely to require real depreciation to maintain sustainable net external debt. Our estimates point to somewhat larger disequilibria than those of IMF country teams, however, any estimates of equilibrium exchange rates are subject to sizable uncertainty.
International Monetary Fund
The paper reviews the adequacy of the Fund’s precautionary balances and proposes a more transparent and rules-based framework for adjusting the precautionary balance target through time. The framework seeks to provide sufficient flexibility to capture the main elements considered relevant by the Board in the past when setting the target and draws on approaches followed by other IFIs, adapted to the particular circumstances of the Fund.
Mr. George A Mackenzie and Mr. Peter Stella


Central banks and other public financial institutions act as agents of fiscal policy in many countries. Their "quasi-fiscal" operations and activities can affect the overall public sector balance without affecting the budget deficit as conventionally measured, may also have important allocative effects, and increase the effective size of the public sector. This paper analyzes the macroeconomic and financial effects of such quasi-fiscal activities, as well as the taxes, subsidies, and other expenditures that such activities introduce outside the budget. Measurement and accounting issues are addressed, and policy recommendations are offered.