Questo blog è dedicato non solo, ma principalmente, al progetto Moneta Fiscale / Certificati di Credito Fiscale (MF / CCF), finalizzato a risolvere la crisi dell'Eurozona.
La descrizione più aggiornata del progetto è reperibile in questo post.
giovedì 18 giugno 2015
Tax Credit Certificates for Greece are a Viable Solution
By Biagio Bossone and Marco Cattaneo
solution is yet in sight for the Greek crisis, the possibility of introducing a
parallel currency is receiving increasing attention from economists and the
financial press. Together with a group of Italian economists, we have devoted
considerable attention to developing a viable scheme.
We deem it important to point
out that parallel currency schemes fall into two broad categories, with deeply
different implications. The first would call for Athens to introduce IOUs
(promissory notes), which would be used by the government to pay public
salaries and pensions, thus freeing up euros for external debt service. European
institutions and leaders have not denied this possibility.
In fact, IOUs would not prevent
Greece from defaulting chaotically. If Greece started using IOUs as substitute
for euros, this would signal its inability to stay within the Eurosystem. Bank
deposit runs would accelerate, and Grexit would follow. In any case, the
commitment to reimburse the IOUs in euro would have no credibility, since
Greece is de facto insolvent.
The Greek government could instead
introduce an instrument that would mobilize euros for domestic private-sector
spending, thus supplementing the purchasing
power of households and enterprises. The difference is subtle and often escapes
even expert attention.
Greece today runs a balanced
primary public-sector position. This means that it receives as many euros as it
spends, net of interest payments. If payments to creditors were to stop, Greece
would have enough euros to support its public expenditures: it would not need
to introduce a monetary instrument to replace short euros.
What Greece is missing,
instead, is the resources to re-launch its economy. To this end, it should
issue what we call Tax Credit Certificates (TCCs). These certificates entitle bearers
to equivalent tax discounts that would mature in, say, two years after
issuance. Such entitlement could be liquidated in exchange for euros and used
for immediate spending. Liquidation of TCCs would take place against purchases by
those who want to acquire them for future tax discounts. For investors, TCCs would
be a very safe instrument with a yield comparable to a two-year zero-coupon
bond: by not being debt, it would be impossible for the government to default
Through liquidation, TCCs
allow future tax discounts to be transformed into current spending. Even under
most conservative estimates (i.e., fiscal multiplier below one), the output
recovery triggered by the TCC stimulus and taking place before TCC redemption would
generate enough fiscal revenues to compensate for the euro shortfalls caused by
It is worth noting that while they
incorporate some currency features, TCCs would not be legal tender and would not
affect the ECB’s monopoly status as issuer of the euro.
The Greek government could
issue, say, 7 billion euros of TCCs (about 4% of GDP), to be assigned to a
variety of uses: allocations to enterprises in relation to their labor cost (so
as to immediately improve their competitiveness), workers’ salary support, and social
transfers to needing households. Receivers of TCCs could exchange them for euros
in the financial market at discount on their nominal value. The discount would
be small, since total TCC issuances would not be large relative to total fiscal
revenues (7 billions would only represent about 10% of total gross revenues).
TCC assignments would supplement disposable incomes and make Greek exports
There would not be “Gresham’s
law” effect, whereby a bad currency drives the good one out of circulation: TCCs
would supplement, not replace, the euro and their overall stock outstanding would
not be large enough to displace the euro.
Greece should propose to
creditors a new financial plan whereby it would commit, say, 2% of GDP to
external debt payments (in euro) starting in 2016. The commitment would be
credible once taken in the context of a pro-growth economic program driven by
the TCC stimulus. In addition, safeguard clauses could be introduced and activated
in the event of underperformance vis-à-vis the 2% reimbursement commitment. For
instance, the government could entitle taxpayers to receive additional TCCs
bearing longer maturities as compensation for additional euro tax payments, or TCC
holders could be incentivized to postpone the use of TCCs for tax discounts by
receiving an increase in their face value. Such safeguards would be hugely less
pro-cyclical than those typically imposed by the EU to secure budget targets in
the event of fiscal underperformance.
A “euro+TCC” system would be stable
and sustainable. Greece’s unit of account and legal tender would remain the
euro. Yet the country would gain the means to jump-start the economy, and the prospects
for its creditors would improve enormously.
Political reactions are obviously
a different matter. The EU and ECB might oppose the idea and even take punitive
action against Greece, such as cutting it off the Emergency Liquidity Facility.
This would precipitate Grexit. But this is what Europe doesn’t want: such reaction
would betray ideological furor, and risk triggering the crumbling of the
Eurosystem. We think this is a very unlikely scenario.