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Nothing in the euro treaties prevents you from increasing corporate tax, income tax or whatever else - only corporate lobbying and ideological trends.

If debt is above 60% GDP and deficits would have to exceed 3%, then it is actually Maastricht that forces you to settle on increasing taxes in the middle of a recession. And increasing taxes in a deep balance-sheet recession is wrong. Therefore, the Maastricht Treaty forces us to take wrong macroeconomic policy decisions by outlawing certain options.

See Is Keynesianism now a thoughtcrime? and also Fiscal rules going mad ....

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sat Mar 17th, 2012 at 07:56:27 PM EST
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