Surprising news last week. The Dutch government suffered an unexpectedly large budgetary setback. A pay hike for government workers turns out to have a bigger impact on the budget than previously thought. But why? In the news we read: “the pay hike for government employees is a bigger burden than previously estimated, because inflation is near zero. The government budget is linked to that inflation and, as a result, barely grows. This has resulted in a €2.5-billion-euro windfall.

Negative interest rates are a first step toward what economist Ludwig von Mises once described as a “crack-up boom,” a flight to hard assets. The demand for bank deposits plummets. People pull their money out of the system in large numbers by either withdrawing cash or buying “hard assets.” Yet for the former, it appears the European Central Bank (ECB) already found a solution. The ECB suggested this solution en passant, mere months after the ECB lowered interest rates to negative for... »

Once upon a time there was a liberal vision for Europe. A free trade zone, with free movement of goods, services, people and capital, a single currency (fixed exchange rates), and fiscal competition between jurisdictions. Besides public pressure to limit the free movement of people within the European Union because of the immigration crisis, a trend has been developing over the past few years toward ‘uniform’ corporate tax rates. Taxes have to be equal across the European Union. A big danger, because this will give governments a greater ability to raise taxes. And the Panama Papers — 11.5 million confidential documents involving 214,000 offshore entities that became public through a leak at the Panamese company Mossack Fonseca — will intensify this trend.