The idea was well hidden in the report of the International Monetary Fund which provided a 6.5 billion euro budget gap for Greece. The IMF proposed the imposition of a one-off capital levy of 10% on individuals in order to return the countries to the debt levels of 2007, before the outbreak of the financial crisis.
In the chapter entitled “Did we learn lessons from the crisis,” (p 49), they introduced a “capital contribution.” According to them, due to the abrupt disorientation of the public finances, this one-time levy on private wealth is necessary, like an emergency measure to make the debt sustainable.
According to economists Pigou, Ricardo, Schumpeter and Keynes this measure will be useful and fair, as a “one use” measure which will be better than the default. The capitalists and the bondholders will pay for this cost. There is international experience as such contributions were adopted widely in Europe after the World War 1, but also in Japan after the end of the Second World War.
They also estimated that the tax rate won’t exceed 10%, in order to reduce public debt to pre-crisis level. A sample of 15 European countries is the basis, and they believe that in this way, will be reduced in the levels of 2007 if imposed in the households with positive net wealth.
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