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In this paper, we examine two questions related to the sustainability of the major, neoliberal, economic and social reforms in the new EU member states, namely the flat income tax and private pension pillars. First, we look at the relationship between the political consensus/controversy at the time major policy reforms were passed and the future sustainability of these reforms after a change of government. Second, we explore what we call a paradox of reverse sustainability, whereby the flat income tax has been more politically resilient during the global financial and economic crisis than private pensions, even though ex ante expectations and the literature would lead us to expect the opposite.The paper shows that controversy at the time the reforms were passed had no effect on subsequent sustainability, and the levels of partisanship and public support with regard to a specific reform seem less important than the political costs and benefits. We also find that despite their apparent neoliberal bent, the two policies are versatile enough to be shaped towards a variety of policy goals, allowing their introduction and retention in a variety of economic and social circumstances. In other words, even though private pensions and particularly the flat tax have powerful political connotations, they are by no means policy straitjackets.While both reforms could sustain themselves throughout the 'good' times before the global crisis, their fates diverged during the crisis. Neither public support nor the large constituency of savers could fully protect private pensions from a policy reversal during a period of exceptional fiscal pressure. That is because a reversal was associated with significant, short-term fiscal gains and the states where these reversals took place also took a range of other decisions that were politically extraordinarily difficult. On the other hand, we demonstrate that the introduction or potential reversal of the flat tax was not associated with significant, short-term revenue gains. It is the relatively 'cheap' nature of the flat tax that distinguishes it from private pensions, because it sends a highly cost-effective signal in terms of revenues lost owing to its existence.

Neoliberalism. --- Social policy.

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Monetary policy --- Monetary policy

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This paper encourages EU and national policy-makers to invest in a more comprehensive view of the phenomenon of ‘low-skilledness’. The ‘low-skilled’ label can hide a number of different scenarios: labour market detachment, migration and obsolete skills that are the result of macroeconomic structural changes. For this reason, lifelong learning is necessary to keep up with new technology and to shield workers from the risk of skills obsolescence and detachment from the labour market.

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The financial crisis of 2007-10 has presented a number of key policy challenges for those concerned with the long-term stability of the euro area. It has shown that price stability as provided by the European Central Bank is not enough to guarantee financial stability, and exposed fault lines in governance and deficiencies in the architecture of the financial supervisory and regulatory framework. This book addresses these and other issues, including why the crisis affected some countries more than others, whether the euro is still attractive for new EU states, and what policy changes and structural reforms, both macro and micro, should be undertaken to ensure its future viability. Written by a team of leading academic and central bank economists, the book also includes chapters on the cross-country incidence of the crisis, the Irish crisis and ECB monetary policy during the crisis, and studies on Spain, the Baltics, Slovakia and Slovenia.

Money market. Capital market --- International finance --- European Union --- Monetary policy --- Euro --- Global Financial Crisis, 2008-2009 --- -Euro --- Global Financial Crisis, 2008-2009. --- EEC / European Union - EU -Europese Unie - Union Européenne - UE --- IE / Ireland - Ierland - Irlande --- ES / Spain - Spanje - Espagne --- SI / Slovenia - Slovenië - Slovénie --- SK / Slovakia - Slovakije - Slovaquie --- EEU / Central & Eastern Europe --- 334.151.20 --- 334.151.25 --- 331.30 --- 331.01 --- 333.846.0 --- Global Economic Crisis, 2008-2009 --- Subprime Mortgage Crisis, 2008-2009 --- Financial crises --- Money --- Monetary management --- Economic policy --- Currency boards --- Money supply --- Economische en monetaire unie van de Europese Gemeenschappen: algemeenheden. --- Rekeneenheid, gemeenschappelijke munt van de Europese Gemeenschappen. ECU. Euro. --- Economische toestand. --- Evolutie van de economische cycli. --- Verband tussen het monetair, bank- en kredietbeleid en de economische ontwikkeling: algemeenheden. --- Evolutie van de economische cycli --- Economische toestand --- Verband tussen het monetair, bank- en kredietbeleid en de economische ontwikkeling: algemeenheden --- Economische en monetaire unie van de Europese Gemeenschappen: algemeenheden --- Rekeneenheid, gemeenschappelijke munt van de Europese Gemeenschappen. ECU. Euro --- Euro. --- Business, Economy and Management --- Economics --- Monetary policy - European Union countries