Financial constraints and CO{sub 2} tax in Eastern Europe: A modelling approach
The four East European countries belonging to the {open_quotes}VISEGRAD{close_quotes} group (Poland, Czeck Republic, Slovakia, Hungary) want to join rapidly the European Union. They already benefit from some commercial advantages. Russia will not join the European Union but it also wants to benefit from some commercial relationships with Europe. It Is the reason why these countries in, particular the {open_quotes}VISEGRAD{close_quotes} group, have to respect some financial constraints; in the European Union the Maastricht Treaty requires the following criteria: about the same rates of inflation and Interest, stability of currency, budget deficit less than 3% of G.D.P. and a public debt stock less than 60% of G.D.P. The first objective of the economies {open_quotes}in transition{close_quotes} is to introduce the conditions of a market-oriented economy: price freedom, removal of subsidies, privatization, competition and efficiency incentives. The state itself must respect economic rules, in particular to avoid an excess budget deficit. The privatization process we may observe today is partly due to the search of efficiency incentives; it is largely due to a financial constraint: to avoid the {open_quotes}snowball effect{close_quotes} of public debt. Improving efficiency in the energy sector is possible through {open_quotes}fair{close_quotes} energy pricing, which would allow to cut public subsidies to this sector.
- Research Organization:
- International Association for Energy Economics, Cleveland, OH (United States)
- OSTI ID:
- 416306
- Report Number(s):
- CONF-9507139--
- Country of Publication:
- United States
- Language:
- English
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