In light of the recent credit downgrades – and in some cases the mere threat of such downgrades – throughout the Euro zone from credit rating agencies such as Standard & Poor’s, many affected countries have taken to re-assessing their economic and tax policies.

Some have pondered quick, reactive tax measures to try and combat any downgrading, but history teaches that fools rush in.

Frédéric Donnedieu de Vabres, chairman of Taxand, said that while the series of credit downgrades highlights the “significant income problem possessed by these jurisdictions,” as well as the “sizeable gap in competitiveness between themselves and other countries in the EU”, countries must resist hastily altering tax policies.

Quick-fix tax provisions are not the answer, and in some cases can make the situation worse, he said.

“Damaging as the downgrade headlines appear, these countries must renew...