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UK
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Budget deficit at 12.4% of GDP
Borrow GBP200 billion in FY 2009
Sell GBP220 billion in Gilts in FY 2009
Borrow GBP606 billion by the FY 2013
UK Treasury estimates bailouts will cost taxpayers GBP50 billion, IMF estimates
say GBP132 billion.
Raise the tax rate for those earning over GBP150,000 to 50% from 40%, to start
from April 2010. Pre-budget report from last year estimated it would be raised to
45%.
Other tax measures
o From 2010-11, tax-free allowances for people earning more than 100,000
pounds will be gradually reduced to zero.
o From 2011, tax relief on pensions contributions will be restricted for those
with incomes of 150,000 pounds and over, and tapered down until it is 20
percent
o Alcohol and tobacco taxes will rise by two per cent - effective later
Wednesday
o Fuel duty will rise by two pence per litre from September
New spending
o GBP 1.7 billion for unemployment
o Maximum state redundancy pay to rise to 380 pounds from 350 a week.
o Pension credit recipients who may have overpaid tax on their savings
income in the past 6 years will be contacted as part of a tax-back
campaign. Those who claim are expected to receive around 200 pounds on
average.
o An extra payment alongside this year's Winter Fuel Payment, worth 100
pounds for households with someone aged over 80 and 50 pounds for
households with someone aged over 60.
o Motorists can apply for a 2,000 pound discount on a new car when they
trade in cars more than 10 years old until March 2010. The measure is
worth 600 million pounds with the government putting up half and the rest
matched by participating manufacturers.
o 525 million pounds funding for offshore wind over the next two years
under the Renewables Obligation scheme.
Ireland
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Budget deficit target of 10.75% of GDP in FY 2009, an improvement from a
feared 12.75% but still above an earlier target of 9.5%
Spending cuts to save EUR1.5 billion
EUR80 billion to EUR90 billion for toxic asset purchases
Tax measures
o New taxes to raise EUR1.8 billion
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Income taxes doubled to 2 percent, 4 percent and 6 percent at the
respective new entry points of EUR15,028, EUR75,036 and EUR174,980
per annum.
o Corporation tax will be retained at 12.5 percent but Capital Gains Tax and
Capital Acquisitions Tax will be increased to 25 percent with immediate
effect
Projects EUR10.6 billion in spending cuts for 2010-2011 and an additional
EUR3.25 billion from taxation by 2013
BELGIUM-2010 will be debated in fall, but for now they have a huge 09 deficit
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Current Budget deficit is 15 billion euros
According to the High Council for Finance, public debt will increase this year
from 88.7 to 94.7 percent of the GDP, from EUR 305.7 to 330.7 billion.
Half of that debt increase can be attributed to the budget deficit, while the other
half is as a result of financial transactions such as a loan to the KBC bank, the
bailout operation for Kaupthing Luxembourg and the decision to pay invoices
more punctually.
Belgium plans to issue 33.5 billion euros in bonds in 2009. It is targeting 30.5
billion euros in OLO bond auctions of which 15.8 billion euros have already
raised. It aims to raise a further 3 billion euros as part of a euro medium-term note
programme. Officials declined to say how much of this has already been raised.
Belgium has issued 15.8 billion euros of bonds so far this year, representing 51
percent of its planned issuance in 2009
Quote in article says “The government will start to draft the 2010 budget in the
autumn and will have to decide how fast to proceed….The government also has
[yet] to decide whether to raise taxes or cut spending”
NETHERLANDS
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Central government will spend 6 billion Euros in stimulus
Provinces will spend an additional 1.5 billion Euros
The plan includes investment for road construction, speeding up planned
investments in infrastructure, funding for renewable energies and the abolition of
the environment tax on air travel. In order to stabilize employment rates, the
government will also introduce part-time unemployment benefit and focus on
youth employment
In 2011the national budget deficit is expected to have risen to 5.7 percent. After
2011 the aim is for the deficit to be lowered by half a percentage point every year
by cost cutting measures, including a rise of the state pension age to 67 years from
65, and health-cost cutting measures
DENMARK-should begin debates in September after government submits in August
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In December they released a budget outlook for 2009: The central government
budget for 2009 reflects total expenses of approx. DKK 617bn in 2009, whereas
total revenues were estimated at approx. DKK 621½bn. The surplus on the
current, investment and lending account, i.e. the CIL-account, was thus estimated
at approx. DKK 4½bn in 2009
In January they agreed on a tax reform package The tax reform implies that
income taxes are reduced by more than 28 billion DKK (1½ per cent of GDP)
(long-term, permanent effect) quickly in 2010 and 2011. On the other hand, taxes
on pollution and energy consumption are raised, slowly through 2019, which
supposedly makes the cut fully financed.
In April a Commission of Defense called for an addition 428 million to add to the
3.5 billion defense budget
Danish state-controlled energy and utility group DONG plans to spend 1 billion
Euros on acquisitions.
Schedule
May: Line ministries give their draft Budget proposals to The Ministry of Finance
May – June: Ministry of Finance performs technical scrutiny of the Budget proposal
and holds discussions with line ministries on the financing of new initiatives etc.
August: Last minute estimates of the economic situation and the influence on the
Budget proposal
End of August: Presentation of the Budget proposal
Early September: First Parliamentary discussion on the Budget proposal
NORWAY-revised budget due in May
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In late January, when it presented a $2.9 billion economic stimulus package, the
government projected a 2009 non-oil structural deficit -- reflecting the amount of
oil money to be spent -- of 119 billion Norwegian crowns ($16.82 billion). That
means spending 5.2 percent of a sovereign wealth fund that saves oil money for
future generations, exceeding the government's 4 percent cap on spending of oil
cash. Presented in January:
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Amendments to the 2009 Fiscal Budget. The proposed measures amount
to NOK 20 billion, of which NOK 16¾ billion is an increase in budget
expenditures and NOK 3¼ billion is targeted tax relief for the business
sector. The structural non-oil deficit will increase by an additional NOK 7
billion as a consequence of revised estimates for some budget items. The
use of petroleum revenues, as measured by the structural, non-oil budget
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deficit, will increase by NOK 27 billion compared to the 2009 Fiscal
Budget. The overall domestic demand stimulus from 2008 to 2009 is
estimated at 2.3 per cent of Mainland GDP. The Government also
proposes widening various loan and guarantee schemes, including
increased lending from the Norwegian State Housing Bank. These
measures amount to NOK 8 billion.
The Government now forecasts zero growth in Mainland GDP in 2009,
compared to an estimate of 2 per cent in the 2009 Fiscal Budget presented
in October 2008. Employment is expected to decline by 1 per cent from
2008 to 2009, and unemployment is expected to increase from
approximately 2½ per cent in 2008 to 3½ per cent in 2009.
The overall domestic demand stimulus, as measured by the increase in the
structural, non-oil deficit, is estimated at 2.3 per cent of Mainland GDP, of
which one half stems from the proposed stimulus package. This is the
most expansionary budget in more than 30 years.
The use of petroleum revenues, as measured by the structural, non-oil
budget deficit, is estimated at NOK 119 billion. This is NOK 28 billion
higher than the expected return on the Government Petroleum Fund –
Global. The 2001 fiscal policy guidelines stipulate that the structural nonoil central government budget deficit shall correspond to the expected real
return on the Pension Fund – Global, estimated at 4 per cent of the capital.
However, the guidelines also allow fiscal policy to be used actively to
stabilise the ecnomy and counter fluctuations in production and
employment.
The underlying growth in Fiscal Budget expenditures from 2008 to 2009
is now estimated at 6¼ per cent.
The non-oil budget deficit is estimated at NOK 96.7 billion. Taking
petroleum revenue into account, the Fiscal Budget is estimated to run a
surplus of about NOK 179.2 billion. The consolidated surplus in the Fiscal
Budget and the Government Pension Fund is estimated at NOK 270.5
billion in 2009, or approximately 11 per cent of GDP.
The Government and Norges Bank (the Central Bank) has so far
implemented several measures aimed at maintaining an appropriate level
of lending to the business and household sectors:
The approved 2009 Fiscal Budget was estimated to give a demand
stimulus equal to 0.7 per cent of mainland GDP.
A NOK 350 billion facility to provide liquidity to the banks, in which
Government Bonds are swapped for covered bonds.
The export guarantee scheme of GIEK (Guarantee Institute for Export
Credits) is increased by NOK 50 billion.
A special lending program of NOK 30 billion to Eksportfinans to facilitate
continued financing of contracts that qualify for the use of supported
export credits (so called CIRR-loans).
Norges Bank has reduced its key interest rate by 2.75 percentage points
since October 2008 to currently 3 per cent. The Bank has also taken
actions to provide liquidity to the financial sector
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Unemployment, although on the rise, is still low by international standards at
around 3 percent, and the central bank has slashed its key rate to 2.0 percent -down 3.75 points since last October to help fuel the economy during the
downturn. The Prime minister has said “"The most important thing will be to
secure jobs."
Prime Minister Stoltenberg said it was too early to say if there would be
additional measures in the revised 2009 budget due in May
DnB NOR expected 2009 writedowns of around 8-10 billion crowns ($1.18-$1.48
billion)
Norway’s finance minister had proposed that the government’s $39 billion
pension fund allocates $3 billion to sustainable investments – potentially the
largest such allocation ever made.
SWEDEN(April 9)
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The agency saw the budget deficit swelling to 148.7 billion Swedish crowns
($18 billion) this year before subsiding to 85.5 billion in 2010. In its previous
forecast, issued in December, it forecast a deficit of 6.8 billion crowns in 2009
and 38.9 billion in the following year
New budget released in mid April
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Will give local authorities an extra 17 billion crowns ($2.15 billion) Local
authorities will get a one-off 7 billion crown payment in 2010 and an increase of 5
billion crowns in central government grants in each of the following two years.
The Government is allocating SEK 10 billion in the supplementary budget to
active measures and unemployment insurance. Total labor market policy
expenditures will increase by over SEK 20 billion between 2008 and 2009 and by
about SEK 100 billion for a few years after that.
Government is thus allocating a total of SEK 45 billion in 2009 and SEK 60
billion in 2010 to combat the crisis.
The Swedish economy will shrink 4.2 percent this year after slipping into
recession in the first quarter, the government predicted this month.
Unemployment will rise to 8.9 percent in 2009, and peak at 11.7 percent in 2011,
it said.
The budget will have a deficit of 2.7 percent of gross domestic product this year
and 3.8 percent in 2010, swelling the national debt to 41.4 percent by the end of
next year, Finance Minister Borg predicts.
FINLAND
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Prime minister said in interview (4/19) that debt owed by the state, currently at €50
billion, will increase by about €10 billion this year, as the government tries to
stimulate its economy. Overall government debt at 30% of GDP will rise to at
least 50%.
As of 3/25 (agreements about spending limits)
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Over the period 2009 – 2010, Government tax revenue is estimated to diminish by
an average of just under 8 per cent a year, after which it would start growing by
just over 7 per cent a year towards the end of the review period. Between 2010 –
2013, annual revenue estimates are set to be on average EUR 7.6 billion lower
than projected a year ago.
In order to provide help to municipalities, the Government will take on some of
the deficit by making adjustments in the tax base. This way, basic public services,
municipal daycare, schools and health centers, can be secured during difficult
times as well. With the measures proposed, the Government will strengthen local
government finances by a total of approximately EUR 468 in 2009, EUR 649
million in 2010, and EUR 674 in 2011.
The corporate income tax apportionments to local authorities will temporarily be
increased by 10 percentage points to strengthen the financial basis in
municipalities. The tax apportionment to local authorities will rise from 22.03 per
cent to 32.03 per cent for the period 2009 – 2011.
The fluctuation margin of the general real estate tax collected by local authorities
will be readjusted from the current 0.5 – 1.0 per cent to 0.6 – 1.35 per cent.
The fluctuation margin of the real estate tax for permanent residential buildings
will be readjusted from the current 0.22 - 0.5 per cent to 0.32 – 0.75 per cent.
Tax increases will raise the aggregate energy tax accrual by one fourth, i.e. by
approximately EUR 750 million. Tax increases are mainly targeted at business
(EUR 515 million), but also at households to a certain extend (EUR 235 million).
The excise duty on alcoholic beverages will be raised by 10 per cent as of 1
October 2009. Calculated in euros, the increase focuses on spirit drinks. The tax
increase will increase Government tax revenue by an estimated figure of EUR 70
million.
Value added-tax on foodstuffs will go down by 5 per cent to 12 per cent as of 1
October 2009.
The Government will implement the proposals on pensions policy and
unemployment security made by labour market organisations as of 1 October
2010. As these decisions enter into force, income security expenditure is
estimated to go up by EUR 89 million and labour market support expenditure by
EUR 11 million. At the same time, expenditure related to basic social protection
would go down by just under EUR 1 million. Due to these changes, Government
expenditure is projected to increase by a total of EUR 12 million in 2010
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Appropriations outside the spending limits, such as those for financial
investments, central government debt interest payments, funding of national
pension payments, unemployment security and housing allowance will increase
due to the weakened economic outlook. In 2010, expenditure outside the spending
limits is forecast to exceed the estimate presented in the spring 2008 decision on
spending limits by approximately EUR 3.5 billion.
Central government debt is projected to reach a total of approximately EUR 64
billion this year. According to the projection, central government debt will
continue to grow throughout the budget planning period, totalling around EUR
103 billion in 2013, or 50 per cent in relation to GDP.
In national accounting terms, it is forecast that central government finances will
remain in deficit throughout the budget planning period. By 2011, the deficit is
projected to stand at 4.7 per cent in relation to GDP.
As of Feb 3 2009 (government submitted budget
Additional info here
http://www.vm.fi/vm/en/03_press_releases_and_speeches/01_press_releases/20090203S
upple/name.jsp
http://www.valtioneuvosto.fi/ajankohtaista/tiedotteet/tiedote/en.jsp?oid=252614
AUSTRIA
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Deficit will rise to 3.5% of GDP in 2009, and 4.7% in 2010
Public debt is set to rise from 62.5% of GDP last year to 68.4% this year and a
projected 78.5% by 2013
Tax revenues will drop by 3.7 billion Euro, or 5%. 3.3 billion was due to a tax
reform enacted in first 100 days of 2009, the rest of the fall is from lower incomes
Capital injections into banks are expected to reach 10 billion Euro for 2009
Education ministry tried to save €525 million by having teachers work more,
teachers' union protested; savings had to be cut back to €126m instead.
Things they did before budget was released
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Tax reform mentioned earlier (3.3 billion cut)
tax cuts and stimulus measures worth more than 5 billion Euros, so it would seem
stimulus was worth 1.7 billion Euros
Suspended the general salary adjustment of government officials in an effort to
save as much as three million Euros.
injecting 100 million Euros/year into the health insurance institutions provided
that they cut internal costs
two economic stimulus packages (for enterprises and jobs) and a bank aid
package (100 billion Euros for stabilizing savings deposits and mobilizing the
credit sector);
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tax cuts and stimulus measures worth more than 5 billion Euros, so it would seem
stimulus was worth 1.7 billion Euros
France
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The European Commission expects France to have a budget deficit of 5.6% of
GDP in FY 2009, and 5.2% in FY 2010
The IMF said France’s deficit would be 6% in FY 2009 and 6.2% in FY 2010
Prime Minister Francois Fillon expects France's budget deficit to hit 6% of GDP
in FY 2009, and stay above 3% until at least 2012.
On April 22, 2009 Fillon told France Inter radio the government would not
increase taxes to try to tame the ballooning budget deficit and ruled out hiking the
retirement age ahead of the 2012 presidential election
Fillon said the jump in the deficit would be temporary and that the government
would look to reduce its spending rather than add to the tax burden to improve
state accounts.
Germany
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Current budget deficit is 3.7% of GDP.
The IMF said the deficit would be 4% in FY 2009 and 5.2% in FY 2010
A report by RWI said the deficit will reach 5.5% by 2010 (source:
http://www.bloomberg.com/apps/news?pid=20601100&sid=afEWcdAsSiV0&ref
er=germany)
On April 22, 2009, Merkel said, “We shouldn’t talk about a third stimulus
package. Instead we’ll let current measures take effect.”
The two stimulus packages passed so far are worth a combined EUR81 billion
No statements about new tax measures
Italy
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According to OECD, Italy’s budget deficit will reach 5% of GDP in FY 2009.
The IMF said the deficit would be 4.8% in FY 2009, and rise further to 5.2% in
FY 2010
OECD noted that Italy had ''limits on the fiscal measures it can adopt'' to deal with
the crisis and that with its high public debt and 'jittery' stock market ''there's not
much it can do''.
Portugal
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EIU projects a sharp rise in the budget deficit to around 5% of GDP in FY 2009
and 2010.
In Jan. 2009, EIU stated, “The current-account deficit [of Portugal] is estimated at
11.5% of GDP in 2008, and we expect that it will shrink a little during the
forecast period, to stand at around 8% of GDP in 2010.”
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Further, EIU noted that Portugal had “[extended aid] to the financial sector and
further outlined new measures to support the Portuguese automotive sector, a key
producer for export.”
Switzerland
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buget surplus 1.2% in 2008; forecasted a surplus of 1% by OECD but EIU says:
Fiscal consolidation will be reversed in 2009-10, with the budget balance
falling into deficit in 2009-10, as fiscal stabilisers come into play. (apr. 2009:
http://www.economist.com/COUNTRIES/Switzerland/profile.cfm?folder=Profil
e-Forecast)
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Feb. 11 : the second phase of anti-crisis measures ; increasing the expenses
budget with 700mil francs to serve infrastructure projects, projects supporting the
regional policy, research, ecological projects, modernization works, tourism
marketing; The fiscal measures proposed aim at freezing the taxes for families taxpayers will save more than 400 million francs in taxes. To lighten the tax
burden on families with children, the Federal Council has launched the public
consultation on a draft reform of the taxation of families. The measures will lead
to a decline in revenue of about 600 million francs for the federal direct tax. The
consultation process lasts until 3 April 2009 and it is anticipated that the changes
resulting from entering into force on 1 January 2010.
Dec. 2008: At its meeting in December 2008, the Parliament removed the
blocking of funds (205 million) and carried out targeted investments by increasing
the budget 2009 (136 million francs). The increase was supported also by 86
million francs from the funds allocated to buildings sanitation works. The Federal
Council has decided to release the sum of 550 million francs from reserves on 1
January 2009 to fight the crisis effects.
Sources:
http://www.efd.admin.ch/dokumentation/medieninformationen/00467/index.html?lang=fr
&msg-id=25281
http://www.evd.admin.ch/themen/00129/01097/index.html?lang=fr
http://www.evd.admin.ch/themen/00129/01097/index.html?lang=fr&download=NHzLpZ
eg7t,lnp6I0NTU042l2Z6ln1ae2IZn4Z2qZpnO2Yuq2Z6gpJCDdYJ4gGym162epYbg2c_J
jKbNoKSn6A-Spain –
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March 24 - EU Commision gives Spain until 2012 to bring budget deficit to
below 3% of GDP
EU Commission forecasts Spain’s deficit to be approx. 6% for 2009 & 2010
Serbia – being debated – check if adopted
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budget deficit in 2008: 2.5%
Apr. 7. Serbian Prime Minister Mirko Cvetkovic stated today that the government
has adopted a plan for economic stability which will reduce the expenses for
public administration by RSD 100 billion, or nearly €1 billion. Cvetkovic told a
press conference that 85% of that sum will be generated by reducing expenses
while 15% will come by increasing revenues, noting that this is the largest fiscal
adjustment to Serbia’s public finances in the past two decades.
Sources: http://www.srbija.gov.rs/vesti/vest.php?id=54830
Bosnia
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130 million euro budget deficit accrued from 2008.
The parliament of Bosnia's Muslim-Croat federation endorsed on Monday the
2009 budget revised up to 1.9 billion Bosnian marka ($1.3 billion) from 1.6
billion marka to cover the deficit accumulated in 2008. The Muslim-Croat
federation government decided last month to borrow 140 million marka in
syndicated loans from commercial banks to cover the 2008 budget deficit of 260
million marka. The remaining part will be covered from the succession funds of
the former Yugoslavia's assets. The budget revenues in the federation fell 15.3
percent in the first quarter of 2009, reflecting cuts in industrial output and exports.
Sources: http://www.guardian.co.uk/business/feedarticle/8442099 ;
http://balkaninsight.com/en/main/news/17488/