Tax Anticipation Notes: A Timely Alternative Financing Instrument for Greece

By Robert Parenteau
Editor’s note: This idea was recently endorsed by Wolfgang Munchau in the Financial Times as a means of sustaining fiscal expenditure despite the present standoff in Greek negotiations with the economic group formerly known as the Troika. The use of tax anticipation notes as Greek local scrip to give Greece greater fiscal space was last mentioned on this site by the author of this essay in December 2013.
The recent election of an explicitly anti-austerity party in Greece has upset the prevailing policy consensus in the eurozone, and raised a number of issues that have remained ignored or suppressed in policy circles. Expansionary fiscal consolidations have proven largely elusive. The difficulty of achieving GDP growth while reaching primary fiscal surplus targets...

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