Kenny rows with Sarkozy !

dan_d

We keep our corporation tax where it is.

We leave the bailout deal sit for the moment - and go back to it at maybe 6 monthly intervals.

They've renegotiated Greece's deal to 7 years. And they're getting increasingly jittery about Portugal, Spain, and to an extent, Belgium.
Realistically, this deal has barely been in place 3 months. Let it pan out another few months, see how much more action the Gov is prepared to take to rein in spending, see how the other countries do - whether or not they need to be bailed out too - and then revisit it. There's no point going in guns blazing at this point in time, and then hailing it a disaster when nothing changes. In the long run for the EU, it's a hell of a lot better for us to be paying them back, be it with reduced interest or a longer term, than it is for us to hold up our hands and say we can't afford it.Especially if they've had to bail other countries out. But equally, we can't expect them to dance to our tune after a short time period and few token efforts that haven't achieved much towards their requirements.

I reckon....hasten slowly on this one.Our new Government isn't even in the door a week.Learn patience, and remember that saying - keep your friends close and your enemies closer.

Scofflaw

dan_d wrote: »

We keep our corporation tax where it is.

We leave the bailout deal sit for the moment - and go back to it at maybe 6 monthly intervals.

They've renegotiated Greece's deal to 7 years. And they're getting increasingly jittery about Portugal, Spain, and to an extent, Belgium.
Realistically, this deal has barely been in place 3 months. Let it pan out another few months, see how much more action the Gov is prepared to take to rein in spending, see how the other countries do - whether or not they need to be bailed out too - and then revisit it. There's no point going in guns blazing at this point in time, and then hailing it a disaster when nothing changes. In the long run for the EU, it's a hell of a lot better for us to be paying them back, be it with reduced interest or a longer term, than it is for us to hold up our hands and say we can't afford it.Especially if they've had to bail other countries out. But equally, we can't expect them to dance to our tune after a short time period and few token efforts that haven't achieved much towards their requirements.

I reckon....hasten slowly on this one.Our new Government isn't even in the door a week.Learn patience, and remember that saying - keep your friends close and your enemies closer.

I agree with you about the letting it go a while - renegotiating while the ink is still wet is rarely a runner.

However, it's worth pointing out that the IMF/EU bailout money has relatively little to do with the mounds of debt in our banks. The money that was supposed to go into the banks in February (€8-10bn) was from the NPRF, not from the bailout facility (from which no such amount is even available yet). That means that if what we're talking about is being unable to pay back the IMF/EU bailout money, then we're talking about - very clearly - sovereign default, because barring €15bn available in that facility for the banks on a contingency basis, that loan is for Irish government deficit spending.

The IMF/EU bailout facility for Ireland has nothing to do with the €150bn currently owed by our bailed out banks to the ECB and CBI, or the c. €63bn they still owe in debt securities.

cordially,
Scofflaw

ei.sdraob

It is interesting how Greece gets a further reduction with no strings attached, yet we have to increase corpo rate in return :rolleyes:

dlofnep

Haggling over a packet of crisps to be honest. Seeking a 1% reduction in interest rates while the EU want a more harmonised corporation tax rate, if we are to get the said reduction.

This is not looking out for the interests of the Irish people. We're still going to be riddled with debt, at a level that is completely unsustainable. Default on debt, tell Sarkozy and Merkel to shut up and accept the reality of the situation. We're flat broke, and can't afford to shoulder private debt.

I love how people think Enda is doing Ireland a favour by rejecting any proposals to harmonize our corporation tax. It was never on the cards anyway.

Rubik.

While France's statutory corporate tax rate is 33%, it has an effective corporate tax rate of 19% due to generous credits and reductions built in to the system. This is all about Sarkosy facing into an election with an approval rating of around 30%. He's a spoofer.

Soldie

dlofnep wrote: »

Haggling over a packet of crisps to be honest. Seeking a 1% reduction in interest rates while the EU want a more harmonised corporation tax rate, if we are to get the said reduction.

This is not looking out for the interests of the Irish people. We're still going to be riddled with debt, at a level that is completely unsustainable. Default on debt, tell Sarkozy and Merkel to shut up and accept the reality of the situation. We're flat broke, and can't afford to shoulder private debt.

I love how people think Enda is doing Ireland a favour by rejecting any proposals to harmonize our corporation tax. It was never on the cards anyway.

How do you suppose we fund the deficit if we default?

ei.sdraob

Soldie wrote: »

How do you suppose we fund the deficit if we default?

SF want to go and borrow some more when we do so, since we cant have cuts :rolleyes:

dlofnep

Soldie wrote: »

How do you suppose we fund the deficit if we default?

Return to the markets with a sustainable level of debt. That is the key requirement of re-entering the markets. If our debt levels are unsustainable, nothing else matters. I am advocating a default of non-sovereign debt, not sovereign debt.

ei.sdraob

dlofnep wrote: »

Return to the markets with a sustainable level of debt. That is the key requirement of re-entering the markets. If our debt levels are unsustainable, nothing else matters. I am advocating a default of non-sovereign debt, not sovereign debt.

But SF dont want to cut welfare and public expenditure (if anything the plan is to increase it)

Soldie

dlofnep wrote: »

Return to the markets with a sustainable level of debt. That is the key requirement of re-entering the markets. If our debt levels are unsustainable, nothing else matters. I am advocating a default of non-sovereign debt, not sovereign debt.

If we default on the bank debt (whether or not it's even possible to decouple it from sovereign debt at this stage is another story) then our unsustainable debt problem goes away. The idea that at that point we can simply return to the bond markets to borrow from the very people we have just defaulted on is utterly ludicrous. That's not to mention the fact that returning to the bond markets will also increase our debt burden (it's just that we're not borrowing from the big bad EU or IMF). I'm in awe at the suggestion that the EU/IMF bail out is the reason why we cannot return to the bond markets. We wouldn't have needed a bail out at all if it weren't for the fact that we'd been priced out of the bond markets in November and December as a result of the reckless overspending that Sinn Féin wish to return to.

dlofnep

ei.sdraob wrote: »

But SF dont want to cut welfare and public expenditure (if anything the plan is to increase it)

It wishes to make cuts, like any other party - but not cuts that impact on the most vulnerable in society.

Anonymous1987

There is some confusion here about what Sarkozy is looking for. He is not actually asking Ireland to increase it's corporate tax rate per se, he wants Ireland to participate in a common consolidated tax base.

The difference is that a common consolidated tax base involves harmonising rules such as the consolidated income to each Member State based on the location of factors sales, assets, employment and labour compensation for assessing tax not harmonising the tax rate. It is also worth keeping in mind that there are two considerations in a mind a mandatory and a voluntary system. Under a voluntary system, only companies that would pay a lower total EU tax burden would switch.

The consequences of changing the tax base will possibly see some firms facing lower or higher effective corporate tax rates based on changes to accounting treatment such as depreciation and the location of factors mentioned above. Countries facing lower corporate tax revenue as a result will have to make up the difference elsewhere.

Given that Ireland is likely to lose some tax revenue under such a system it would be counter productive to agree to the CCCTB in return for lowering the interest rate on our loans only to face lower tax revenue with which to repay the interest with. A 1% reduction in the interest rate of the EU portion of the bailout €45bn would generate a saving of €450m which isn't much especially when the lost corporate tax revenue is factored in. For example a loss of 11.5% CT revenue would offset this amount completely based on 2010's annual CT intake.

Spudmonkey

dlofnep wrote: »

It wishes to make cuts, like any other party - but not cuts that impact on the most vulnerable in society.

Vulnerable is a term used very broadly by political parties these days. I'm not sure everyone would have the same definition of it.

sollar

dlofnep wrote: »

It wishes to make cuts, like any other party - but not cuts that impact on the most vulnerable in society.

They want to increase the dole at a time when every working person is seeing their spending power shrivel. Crazy stuff.

MetallicaBass

i agree with you on that one

dlofnep

Spudmonkey wrote: »

Vulnerable is a term used very broadly by political parties these days. I'm not sure everyone would have the same definition of it.

I'd classify someone who has lost their job, and is scraping by as vulnerable. I'd classify old people who die because they can't afford their heating to be vulnerable.

ei.sdraob

dlofnep wrote: »

It wishes to make cuts, like any other party - but not cuts that impact on the most vulnerable in society.

@dlofnep

you can not have it both ways unfortunately


i think we will have no choice but to default (thats where I agree with you) due to the unsustainable debt levels

but i do recognize that the cuts will have to be made one way or another, the gravy train has derailed (thats where we go separate ways)

Spudmonkey

dlofnep wrote: »

I'd classify someone who has lost their job, and is scraping by as vulnerable. I'd classify old people who die because they can't afford their heating to be vulnerable.

And yet they include feckless layabouts who wouldn't work to warm themselves.

dlofnep

Soldie wrote: »

I'm in awe at the suggestion that the EU/IMF bail out is the reason why we cannot return to the bond markets.

The reason we cannot return to the markets is because we have an unsustainable level of debt. We will not be able to return to the markets in 3/4 years because we will still have an unsustainable level of debt.

This is the shared view of many economists.

dlofnep

Spudmonkey wrote: »

And yet they include feckless layabouts who wouldn't work to warm themselves.

No they don't. Anyone who is in a position to work, avails of a job offer and declines it without a real cause (IE: disability) isn't vulnerable, and that is not who Sinn Féin includes as vulnerable. We're all aware that there is serious welfare fraud in this state - and Sinn Féin would look to combat that to ensure that there is sufficient funding for those who really need it. We all know layabouts exist, who are happy to sit on their hole all day. We need to weed these out and not class everyone who is on welfare as this type of person. It is disgusting and intellectually dishonest.

Spudmonkey

dlofnep wrote: »

The reason we cannot return to the markets is because we have an unsustainable level of debt. We will not be able to return to the markets in 3/4 years because we will still have an unsustainable level of debt.

Which we won't have in 3/4 years? Even though that will be 3/4 years borrowing 20bn a year?

dlofnep

ei.sdraob wrote: »

@dlofnep

you can not have it both ways unfortunately


i think we will have no choice but to default (thats where I agree with you) due to the unsustainable debt levels

but i do recognize that the cuts will have to be made one way or another, the gravy train has derailed (thats where we go separate ways)

I'm not having it both ways. I wish to see cuts also, but from the top-down. So I'm unsure where you're coming from.

dlofnep

Spudmonkey wrote: »

Which we won't have in 3/4 years? Even though that will be 3/4 years borrowing 20bn a year?

Our debt levels will still be unsustainable, and thus - we will not be in a position to re-enter the international markets. Economic commentators have stated that if we do not default, we will be forced to do so on sovereign debt later down the line. The prop up of banks has not stopped capital flight, and has not instilled confidence in the Irish banking sector - hence our inability to approach the markets for favourable rates.

This will continue to be the case until we have a sustainable level of debt. I'm not the only one that is saying this. We can of course implement strategic cuts to be more fiscally responsible. It's where these cuts are to be implemented that parties vary on.

ZWords

P. Breathnach wrote: »

Sometimes the facts spoil a good rant:
1. The row was not about our bailout terms, but a proposal to adopt a Common Corporate Tax Base, a matter that is largely technical, but which some people regard as the thin end of a wedge which might erode out tax independence [See http://www.rte.ie/news/2011/0311/euro-business.html].
2. Cowen also rowed with Sarkozy on the same matter [See http://www.irishtimes.com/newspaper/frontpage/2011/0205/1224289077668.html].
3. Everybody rows with Sarkozy: he's a feisty little bugger, and annoying as hell.

Kenny's posturing might make us feel better, but the suituation hasn't changed; We can't do much at all until the Euro banks go into meltdown and it is clear that Ireland is NOT to blame. Then we should welch on our committments immediately and giggle while the German banks fall like ninepins. In the meantime the 12 1/2% rate is our only source of capital supply, so let's take a leaf from our Northern friends; "No surrender". Here's hoping that the loony strain of Irish correctness that sent Dev to condole with the Germans on the death of Hitler doesn't get in the way of doing the nasty stuff...

ei.sdraob

dlofnep wrote: »

I'm not having it both ways. I wish to see cuts also, but from the top-down. So I'm unsure where you're coming from.

as is obvious from this thread the bottom and the middle already barely pay any taxes

dlofnep

ei.sdraob wrote: »

as is obvious from this thread the bottom and the middle already barely pay any taxes

People who earn more pay more, people who earn less pay less. What's the problem?

ei.sdraob

dlofnep wrote: »

People who earn more pay more, people who earn less pay less. What's the problem?

You tax them even more and they find ways not to pay, end result is less money from taxes

unless SF are planning to build a big wall to keep everyone in and impose capital controls in our little Cuba :P

dlofnep

ei.sdraob wrote: »

You tax them even more and they find ways not to pay, end result is less money from taxes

People on low wages have very little disposable income and can't afford to pay. That's the reality of the matter.

ZWords

dlofnep wrote: »

People on low wages have very little disposable income and can't afford to pay. That's the reality of the matter.

A significant proportion of the population - who have relatively low burdens in respect of rent and mortgages and medical expenses - are paying very little tax at all. These are old people, whose tax rates and medical card privileges should be on the same basis as the rest of the population.

Drumpot

The Raven. wrote: »

I would love to have heard that argument. Is there a clip of it anywhere?

I think it went something like this -

Kenny -"Well Nicholas, its been good talking to you, I just wanted to ask you one last thing. I promised the Irish people that I would fight hard on their behalf so I am going to have to publically look like I have been arguing with you. Its all for show, you know the craic".

Nicholas - "I have no problem with this Enda. I dont mind being the baddy to your people once you can keep them in check".

I would love to believe that there was heated arguments and that Kenny left them in no uncertain terms that we were going to stick up for ourselves. In the absence of tangible proof, all we have is "reports. When I start to see evidence that this "new approach" is actively making a differance I will be satisfied.

Until then I will be what everybody should be, sceptical.

Before anybody starts ranting that I am anti FG or FF, I am not affiliated with any party. I just expect more then ragtag waffle to impress me.