Shane Ross: Reduce Corporation Tax to 9.9%

CDfm

K-9 wrote: »

Obviously there are flaws with the Euro, it isn't a matter of admitting them.


There are major flaws with having your own currency too and this is what Euro sceptics have great difficulty admitting,

There are fundamental flaws in it .

The ERM was imperfect but it was self regulating.

The sceptics will say that you cannot trust government or civil service to regulate as they will try to defy the laws of economics.

My own view is that the conditions were not right for Ireland.

eg. your dismissal of Iceland.

I think Iceland is an example but it is not a theoretical model.

It was neither in the euro or the eu.

I used to buy fixed rate securities and it would surprise anyone how volitile the market can be and that a relatively small purchase can cause a price change.

It's funny how you don't see the IFSC as our responsibility, yet have no problem blaming Germany and France.

It is a free market economy. Caveat emptor.

I do not excuse the lax regulation and think the public servants & politicians involved should be in jail.

The economics of bank regulation is simple but it does not seem to have been set up as a standard at ECB level .

The question has to be asked, whose responsibility is it then if it isn't the Government that set it up and actively promotes it worldwide with tours by John Bruton.

That is a very good question as "the government" did not set up the euro -it joined it as a very junior partner.

Government is only one section of the decision maker's - we are in the era of the corporate state.Civil servants are a seperate set of decision makers.

Regulation of banking was also unclear.

But what if Germanies trade policy had this as a natural consequence and the policy was in some way deliberate. ?

hmmm wrote: »

Ah come off it. You thought that Luxembourg would have the same weight as Germany in the Euro? You're either extremely naive or creating strawmen.

That was known from the beginning. "Stability" was in our control if we had regulated our banking sector properly.

Maybe so - but Germany is the exportmeister and has achieved a surplus of trade.

Who is protecting our interest.

We ceded part of our sovereignty to europe and not Germany and it is abusing it.

What is that supposed to mean?

It means that is the way it is being run.

The Macro at Eurozone level and say the Micro at interest rate levels on the bailout to Greece and Ireland are being set in accordance with German economic & political objectives.

Sorry, I don't believe you.

I am not bothered.

Monty Burnz

hmmm wrote: »

There's no need for your inside sources, it was clear at the time we signed the EU/IMF deal that not defaulting on Senior debt was a condition. We still did not have to sign the deal if we didn't want to, we could have cut social welfare and public sector salaries by a third overnight and allowed our banking system to collapse if we preferred.

You are missing the point here - it was the bank guarantee over 2 years earlier that screwed us. That is what doubled the national debt at a stroke. Sure, we had a fiscal deficit requiring cuts too, but it's the bank guarantee that we may have been forced into (or at least, the EU asked for it and Fianna Failure rolled over) that has buried us.

K-9

Monty Burnz wrote: »

You are missing the point here - it was the bank guarantee over 2 years earlier that screwed us. That is what doubled the national debt at a stroke. Sure, we had a fiscal deficit requiring cuts too, but it's the bank guarantee that we may have been forced into (or at least, the EU asked for it and Fianna Failure rolled over) that has buried us.

Plus even after 2 years we still hadn't got to the bottom of the banks holes, owed €100 Billion to the ECB or whatever it was at the time and Anglo was still supposedly a viable bank.

The banks probably brought it forward but looking at the deficit of Greece and also Portugal who are probably next and don't have big banking problems, it would have happened about now anyway, when we had to go back to the markets.

hmmm

Monty Burnz wrote: »

You are missing the point here - it was the bank guarantee over 2 years earlier that screwed us. That is what doubled the national debt at a stroke. Sure, we had a fiscal deficit requiring cuts too, but it's the bank guarantee that we may have been forced into (or at least, the EU asked for it and Fianna Failure rolled over) that has buried us.

That's simply wrong. The original guarantee was a unilateral action by the Irish government, we know on the record that at least the French and the British asked us not to introduce it. No-one forced us to introduce the guarantee, quite the opposite.

BluePlanet

Monty Burnz wrote: »

You are missing the point here - it was the bank guarantee over 2 years earlier that screwed us. That is what doubled the national debt at a stroke. Sure, we had a fiscal deficit requiring cuts too, but it's the bank guarantee that we may have been forced into (or at least, the EU asked for it and Fianna Failure rolled over) that has buried us.

I find it absolutely shocking that someone believes the EU asked FF to guarantee all our banks debts.
Don't you remember the alarm and fury of the Brits and the EU over it?

K-9

BluePlanet wrote: »

I find it absolutely shocking that someone believes the EU asked FF to guarantee all our banks debts.
Don't you remember the alarm and fury of the Brits and the EU over it?

And how it came out recently that Lenihan ignored calls from Europe.

Selective amnesia methinks!

Euroland

erictheviking1 wrote: »

Love it! 2 Fingers to the EU.

+1, Me too!

Monty Burnz

hmmm wrote: »

That's simply wrong. The original guarantee was a unilateral action by the Irish government, we know on the record that at least the French and the British asked us not to introduce it. No-one forced us to introduce the guarantee, quite the opposite.

It is not simply wrong - as I said, I got my information from a political correspondant who has no axe to grind and would have been speaking to Lenihan and company. Now, it's possible that it is not true and that the EU were happy to let Anglo go, and it was just more lies from the Fianna Failures, but it's not a cut and dried case.

As I stated, if the information I received is wrong, then you are right and I agree with you. If the information is correct, then my point is correct - the EU insisted the banks be saved, so it should be up to the EU to come up with the money.

Monty Burnz

BluePlanet wrote: »

I find it absolutely shocking that someone believes the EU asked FF to guarantee all our banks debts.
Don't you remember the alarm and fury of the Brits and the EU over it?

Please read what I said, and the source.

By the way, perhaps a distinction needs to be made here between the ECB, the national governments, and the EU commission?

Scofflaw

Monty Burnz wrote: »

It is not simply wrong - as I said, I got my information from a political correspondant who has no axe to grind and would have been speaking to Lenihan and company. Now, it's possible that it is not true and that the EU were happy to let Anglo go, and it was just more lies from the Fianna Failures, but it's not a cut and dried case.

As I stated, if the information I received is wrong, then you are right and I agree with you. If the information is correct, then my point is correct - the EU insisted the banks be saved, so it should be up to the EU to come up with the money.

Your political correspondent is making a very large claim there, if they're referring to the original guarantee, because all the information available says that it was taken without consultation and in a hurry.

They wouldn't be offering you their opinion, by any chance? There seem to be plenty of people who are willing to interpret a remark in a speech made by Bini Smaghi as an ECB diktat, despite the fact that the ECB had no power to issue such a diktat - something that is often forgotten now that they do have the de facto power to do so in our case.

cordially,
Scofflaw

K-9

Monty Burnz wrote: »

It is not simply wrong - as I said, I got my information from a political correspondant who has no axe to grind and would have been speaking to Lenihan and company. Now, it's possible that it is not true and that the EU were happy to let Anglo go, and it was just more lies from the Fianna Failures, but it's not a cut and dried case.

As I stated, if the information I received is wrong, then you are right and I agree with you. If the information is correct, then my point is correct - the EU insisted the banks be saved, so it should be up to the EU to come up with the money.

I think you are getting the guarantee and Anglo mixed up. AFAIK, we were the only country in the Euro to have such a huge guarantee, beyond deposits. Once the guarantee came in, Anglo became a massive problem.

Are you talking about the IMF/EU negotiations or the guarantee in September 09?

Monty Burnz

Scofflaw wrote: »

Your political correspondent is making a very large claim there, if they're referring to the original guarantee, because all the information available says that it was taken without consultation and in a hurry.

They wouldn't be offering you their opinion, by any chance? There seem to be plenty of people who are willing to interpret a remark in a speech made by Bini Smaghi as an ECB diktat, despite the fact that the ECB had no power to issue such a diktat - something that is often forgotten now that they do have the de facto power to do so in our case.

cordially,
Scofflaw

I agree - but I'm just reporting what he told me, and I flagged it from the start as not gospel truth, but rather what I was told by a pol cor who has access to the principles involved.

K-9

Monty Burnz wrote: »

I agree - but I'm just reporting what he told me, and I flagged it from the start as not gospel truth, but rather what I was told by a pol cor who has access to the principles involved.

There are reports that Lenihan basically ignored the EU on the guarantee, he made the call on that night. When he informed Europe they were disgusted as they wanted a coherent, unified plan which Ireland scuppered. Lenihans answer was that he had no time to wait and that is true as Irish banks shares had collapsed that day.

Monty Burnz

K-9 wrote: »

There are reports that Lenihan basically ignored the EU on the guarantee, he made the call on that night. When he informed Europe they were disgusted as they wanted a coherent, unified plan which Ireland scuppered. Lenihans answer was that he had no time to wait and that is true as Irish banks shares had collapsed that day.

The EU insisting that no Irish banks be allowed fail and the above scenario are not mutually exclusive. In addition, you need to distinguish between the ECB, the EU commission, and the national governments.

Further complicating things, you have what the various parties were saying in public, and what they were saying in private. We know for a fact that in Ireland at least, those were not necessarily the same things (recent example: "the IMF are not in town" (as limo full of IMF dudes drives by in background)).

hmmm

Monty Burnz wrote: »

Further complicating things, you have what the various parties were saying in public, and what they were saying in private. We know for a fact that in Ireland at least, those were not necessarily the same things (recent example: "the IMF are not in town" (as limo full of IMF dudes drives by in background)).

I know I shouldn't get sucked into these stupid threads where someone tries to rewrite history, but where would be the fun in that. The Irish guarantee was clearly a "stroke", at the time we thought we could collect deposits from all over Europe by acting unilaterally.

The UK reaction at the time:
http://www.guardian.co.uk/politics/2008/oct/02/alistairdarling.ireland

As the Irish government sought to rush legislation through the Dail to protect its banks, Treasury sources said last night that the Irish finance minister, Brian Lenihan, was told "in no uncertain terms that the scheme was a problem for the UK".

Lenihan told Darling that the decision to safeguard all deposits at six banks had not been planned, but had been an emergency move to prevent the collapse of one Irish bank leading to the failure of another.

I like this in particular, a politics.ie thread full of people gloating at the British opposition to our brilliant stroke. It has the same tone as people today looking for default:
http://www.politics.ie/economy/35483-darling-tells-dublin-irish-guarantee-risks-exodus-savings-uk.html

Not to forget the EU response:
http://www.ft.com/cms/s/0/54da7a90-901a-11dd-9890-0000779fd18c.html#axzz1Gx5GoF37

Last night Dublin said it would consider applications to join the scheme from foreign banks with a significant retail presence in Ireland. Nellie Kroes, EU competition commissioner, pleaded with governments "not to act unilaterally".

We also saw Legarde on Prime Time some months ago confirming that the French were opposed to the Irish guarantee. Here is what Sarkozy said at the time:
http://www.independent.ie/national-news/sarkozy-blames-irish-for-igniting-bank-deal-crisis-1505002.html

FRENCH President Nicolas Sarkozy has blamed the Irish banks guarantee for an international financial crisis in which money flows from country to country depending on who is offering the best deal.

He said Finance Minister Brian Lenihan's €500bn scheme, covering 11 banks here, has resulted in a total loss of liquidity in the City of London as all the cash flowed to guaranteed banks in Ireland.

Now get away with your talk of the EU "forcing" us to introduce the guarantee.

K-9

Monty Burnz wrote: »

The EU insisting that no Irish banks be allowed fail and the above scenario are not mutually exclusive. In addition, you need to distinguish between the ECB, the EU commission, and the national governments.

Further complicating things, you have what the various parties were saying in public, and what they were saying in private. We know for a fact that in Ireland at least, those were not necessarily the same things (recent example: "the IMF are not in town" (as limo full of IMF dudes drives by in background)).

So you are talking about the IMF/EU deal and not the guarantee. Grand.

The problem as far as the EU/ECB/Europe was concerned was the €130 Billion owed to the ECB by Irish banks.

Monty Burnz

K-9 wrote: »

So you are talking about the IMF/EU deal and not the guarantee. Grand.

No, I'm not.

K-9

Monty Burnz wrote: »

No, I'm not.

Grand so. It's just an argument from authority then and that authority being a conversation with a RTE journo.

Scofflaw

Monty Burnz wrote: »

Your political correspondent is making a very large claim there, if they're referring to the original guarantee, because all the information available says that it was taken without consultation and in a hurry.

They wouldn't be offering you their opinion, by any chance? There seem to be plenty of people who are willing to interpret a remark in a speech made by Bini Smaghi as an ECB diktat, despite the fact that the ECB had no power to issue such a diktat - something that is often forgotten now that they do have the de facto power to do so in our case.

cordially,
Scofflaw

I agree - but I'm just reporting what he told me, and I flagged it from the start as not gospel truth, but rather what I was told by a pol cor who has access to the principles involved.

In this case, since his claim, if a claim of fact rather than an opinion, disagrees with a much larger number of people who also had access to the principals involved - including, indeed, some of those who were involved, such as John Gormley - I'm going to have to dismiss it as more likely to be a post hoc rationalisation.

As I said, I appreciate that people say that the ECB's "insistence" that "no bank be left behind" was the cause of Ireland's guarantee, but it doesn't hold water without a consultation by Lenihan et al with the ECB at the time of the guarantee - and no such consultation has emerged. Instead, Lenihan apparently went to McWilliams' kitchen - and mysteriously didn't mention that the ECB had applied pressure not to allow any bank to fail.

Every other claim I've seen that the ECB required us to save our banks has involved the retroactive application of later statements by the ECB that they would not allow any bank to fail - statements which are not in any case ECB diktats that no sovereign government allow a bank to fail, but statements that the ECB will do whatever is required to support the choices of those governments, and not allow through the ECB's own inaction any bank to fail - where a government had chosen to save it.

cordially,
Scofflaw

Monty Burnz

K-9 wrote: »

Grand so. It's just an argument from authority then and that authority being a conversation with a RTE journo.

AGHGHGHGHHG - it's not an argument from authority, I'm reporting here what I was told by someone who has spoken to the guys involved on the subject, and have repeatedly stated that it may or may not be true.

Ash.J.Williams

Joey the lips wrote: »

Our biggest export is Tourism(Tourism is classed as invisable exports when people come into the country). The americans are not traveling so that only leaves the europeans. I dont imagine they will be in the mood for traveling if the euro falls and inflation rises..

Try again;)

Not so sure about that....a strong Euro against Sterling and dollar would close my business for a start and many other SME Software firms who deal abroad.

Scofflaw

Monty Burnz wrote: »

AGHGHGHGHHG - it's not an argument from authority, I'm reporting here what I was told by someone who has spoken to the guys involved on the subject, and have repeatedly stated that it may or may not be true.

But apart from the authority provided by that someone's claim to have spoken to the people involved - and, implicitly, to have been told the truth by them and to have understood it - it's irrelevant and trivially dismissable.

cordially,
Scofflaw

Monty Burnz

Scofflaw wrote: »

But apart from the authority provided by that someone's claim to have spoken to the people involved - and, implicitly, to have been told the truth by them and to have understood it - it's irrelevant and trivially dismissable.

cordially,
Scofflaw

I think you've just rendered journalism in its entirety 'irrelevant and trivially dismissable'... :pac:

Scofflaw

Monty Burnz wrote: »

I think you've just rendered journalism in its entirety 'irrelevant and trivially dismissable'... :pac:

I'm not seeing the problem there...

cordially,
Scofflaw

CDfm

K-9 wrote: »

So you are talking about the IMF/EU deal and not the guarantee. Grand.

The problem as far as the EU/ECB/Europe was concerned was the €130 Billion owed to the ECB by Irish banks.

And, the Irish Banks were owned by whom ?

And the pressure to protect non irish senior bondholders to prevent a Wall Street 1929 or a Black Monday Scenario on the Euro.

So how come we carry the euro can - it has not benefited us.

The Germans earn a whopping 5 billion a year in Seigniorage from the Euro for and if they handed that over to a euro fund thats 40 or 50 billion alone.

K-9

CDfm wrote: »

And, the Irish Banks were owned by whom ?

And the pressure to protect non irish senior bondholders to prevent a Wall Street 1929 or a Black Monday Scenario on the Euro.

So how come we carry the euro can - it has not benefited us.

The Germans earn a whopping 5 billion a year in Seigniorage from the Euro for and if they handed that over to a euro fund thats 40 or 50 billion alone.

Well saying it hasn't benefited us kind of misses the success of multi nationals and exports to the Euro area, the thing we are depending on for growth.

Tbh, this is starting to get a bit Conspiracy Theory stuff for me.

CDfm

K-9 wrote: »

Well saying it hasn't benefited us kind of misses the success of multi nationals and exports to the Euro area, the thing we are depending on for growth.

Tbh, this is starting to get a bit Conspiracy Theory stuff for me.

Maybe it is K-9

The economics of it(the Euro) and banking regulation is not hard.

I have never said we were blameless what I have said was that the system was inherently unstable from day 1.

For a country like Germany to manipulate the mechanism for its own benefit and interest is understandable for the best outcome for its people.

So our guys were going -"nah we will have a soft landing the Germans would never do that", and the German lads were going " ah shure it'll be fine the Irish would never do that" they actually did.

The "ah shure" are assumptions and not conspiracy theories which is why I quoted McGregors Theory X & Theory Y on human behavior.

As a sceptic - the ERM worked fine - but the euro was up to manipulation.

The desired effect for Germany i.e. creating conditions for its trade surplus would create other consequences elsewhere.

The German view is "it would be all fine if you had done exactly as we said" .

Regulation does not work on scouts honour. The ERM worked because market forces made it work. The Euro got rid of "all that red tape".

Politicians have elections to win and electorates want the politicians to deliver.

Scofflaw

CDfm wrote: »

Maybe it is K-9

The economics of it(the Euro) and banking regulation is not hard.

I have never said we were blameless what I have said was that the system was inherently unstable from day 1.

For a country like Germany to manipulate the mechanism for its own benefit and interest is understandable for the best outcome for its people.

So our guys were going -"nah we will have a soft landing the Germans would never do that", and the German lads were going " ah shure it'll be fine the Irish would never do that" they actually did.

The "ah shure" are assumptions and not conspiracy theories which is why I quoted McGregors Theory X & Theory Y on human behavior.

As a sceptic - the ERM worked fine - but the euro was up to manipulation.

The desired effect for Germany i.e. creating conditions for its trade surplus would create other consequences elsewhere.

The German view is "it would be all fine if you had done exactly as we said" .

Regulation does not work on scouts honour. The ERM worked because market forces made it work. The Euro got rid of "all that red tape".

Politicians have elections to win and electorates want the politicians to deliver.

I've read your posts, and I still can't see exactly what the objection is? Being in the euro required countries to act much as they had for ERM - but removed the only effective penalty (not being able to qualify for euro entry) for not doing so?

puzzled,
Scofflaw

View

CDfm wrote: »

Thanks

It still does not get away from the joining being optional & there was conciderable vagueness about its operation.

During the course of the Maastricht referendum, the arguments were made (both pro and contra) on the basis that we would join if we met the relevant criteria. I don't think anyone ever suggested that, should me meet the criteria, that we wouldn't join.

In addition - from memory - the Treaty is written on the basis (assumption?) that, should you meet the criteria, you will join - the only "optional" part was an issue of timing if I remember correctly...

CDfm wrote: »

I would never have predicted that the germans would effectively control it.

Interest rates in the Eurozone are set on the basis of common interest for the whole of the Eurozone. Inevitably, the larger parts of the Eurozone - i.e. Germany, France, Italy, Spain - are going to have more influence on those rates than the smaller parts - i.e. Ireland etc - as they are just more important.

There should be no surprise here - did Ireland set interest rates based on the "Westmeath economy" or the "South Dublin" one? Or - when directly linked with Sterling - were those counties the bell weathers for interest rates or was it the stock-broker bonus influenced housing markets of Kent & Surrey?

All that meant was we needed to keep an extremely sharp eye on what was happening in the core Eurozone economies at all times. Instead, what we got was "We're Boston not Berlin" rhetoric which went out of its way to ignore those economies. Basically, we engaged in "economic bungee jumping" and are now suffering the resultant whip-lash as reality kicks in very sharply.

CDfm wrote: »

I would never have classed myself as a euro sceptic but that is what I am I suppose.

I can't comment on your position on Euro-scepticism. We - as a small state - need to be realistic though. Contrary to popular belief, neither the EU nor Europe (were there no EU) will ever hang on the word of politicans and economists here. As such, we need to work d*&n hard to make sure that the interests of Ireland and the EU are closely aligned wherever possible. That is possible in large part but delusions of grandeur and/or persecution complexes on our part will do nothing to help achieve that.

CDfm

Scofflaw wrote: »

I've read your posts, and I still can't see exactly what the objection is? Being in the euro required countries to act much as they had for ERM - but removed the only effective penalty (not being able to qualify for euro entry) for not doing so?

puzzled,
Scofflaw

The Euro is not the same as the ERM -the ERM had the discipline of market correction. This does not.You keep saying the Euro was workable and the problems had been worked out. Not so.

You also say "But removed the only effective penalty (not being able to qualify for euro entry) for not doing so?" . That is not the same as the discipline of market correction using the "imperfect pegs" of the ERM..

As a small open economy we need to be able to secure a comparative advantage where we can vis a vis Europe. Otherwise no industries will base here.

My feeling was always that it could not work in the same way harmonisation of corporation taxes is not to our benefit.

So if we operate as a low (relative)wage low CT economy we are diverging from the EU model not converging.

If we converged with Germany then we loose our competitiveness as an economy. We are a poor country in terms of investment capital and rely on foreign investment. It is this convergence and harmonisation that I have a problem with.

(Germany had its re-unification too - so its objectives are more complex. So Germany is a federation within a federation -and both an accession state and original EU member state.)

So the Germans are applying the principles of the Euro in the Macro at one level and at the micro in others.

Tight regulation of the Euro would probably have made it harder for the Germans to have gotten out of their recession and into a sustained surplus position. Thats my gut feel.

The convergence/harmonisation is not where we want to be.

Being pro-Euro in this context is like being a turkey voting for Xmas.It could never work for us.