Euro area entry calls for more fiscal flexibility to absorb cyclical shocks that cannot be dealt with by the common monetary policy. At the same time fiscal consolidation must not be put at risk, especially given rising ageing related costs.
Tax reform is an on-going process, with tax systems continuously adopting to reflect changing economic, social and political circumstances. Over the last two decades, almost all OECD countries have undertaken structural changes in their tax system which have altered the way these systems function and their economic and social impacts. In some countries – as, for instance, many of the Eastern European economies in transition - the