Gilles Lepesant

The Central European model of development has until recently rested on a low interest rates, significant increases in consumption, heavy dependence on capital inflows, open markets especially towards Western Europe, and for some specialization in cyclical industries (automobiles). The crisis has highlighted on the one hand the growing divergence between the countries of Central Europe and on the other their high level of interdependence which has necessitated cooperation in their relations with the EU. While Western Europe is unlikely to experience a repeat of the 1930s, it is possible that recovery will prove illusory as it did between the two world wars. Witness the case of the automobile sector which became a major contributor to GDP and source of in Central Europe but whose future prospects are uncertain. Regional policies of which new member states are the beneficiaries should, in theory, encourage innovation, pro-employment policies, and sustainable development as means to ensuring recovery

Antoine Vion, François-Xavier Dudouet, Eric Grémont


Alexandrine Brami Celentano, Jean-Marc Siroën

Since the 1970s, the world follows a triple evolution in favor of democratization, opening and decentralization. Brazil has been following this movement with a democratic and decentralizing constitution and by the adoption of market-friendly policies. However, since the Real Plan (1993), Brazil is recentralizing its fiscal policy. The huge increase of public expenses is predominantly at the profit of the Union, which imposes new fiscal constraints to the States and Municipalities. If the international integration is frequently associated to tax limitations and decentralization, Brazil would depart from this general trend. However Brazilian integration is recent and partial. Integration does not seem to increase inequalities what would justify a centralized transfer from the “winning” regions to the “losing” ones. The fiscal recentralization by higher public expenses might be therefore explained by the political will to reduce initial inequalities and to implement a better social protection. We show that fiscal recentralization is also the consequence of a distorted fiscal system notably in the nature of social security taxes and the type of VAT (ICMS) applied by States.