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Monday Newspaper Review - Irish Business News and International Stories - - September 29, 2014
By Finfacts Team
Sep 29, 2014 - 11:41 AM
Finfacts: Apple's foreign tax rate tumbled after 2007 Irish 'advanced opinion'
A raft of bodies that represent professionals are seeking changes to rules to allow bankrupt members continue to practise.
The dramatic moves reflect a debt default crisis that has engulfed formerly high-rolling professional classes.
These people went on a borrowing binge, piling money into property investments during the boom.
Thousands of members of the professional classes are now expected to declare themselves bankrupt, with others set to enter a Personal Insolvency Arrangement (PIA).
Professionals borrowed to buy into property syndicates, some led by the likes of former tax inspector Derek Quinlan, to buy office blocks and apartment complexes.
They are now on the hook for massive debts they can’t pay, with experts predicting a tsunami of bankruptcy and insolvency arrangements.
The European Commission will accuse Apple of benefiting from illegal state aid here, based on preliminary findings of an investigation into tax deals.
The commission is expected to publish its opening decision in the Apple case today, explaining why it reached the preliminary view that two tax deals agreed between the US company and the Irish government-in 1991 and 2007-amounted to illegal state aid, according to a report in the 'Wall Street Journal'.
Apple will then have 30 days to respond to the EU's decision, according to people familiar with the matter.
It is adamant that its agreements with Ireland did not break any laws. “There’s never been any special deal, there’s never been anything that would be construed as state aid,” Luca Maestri, Apple’s chief financial officer, told the Financial Times today.
The world's biggest bond fund house has moved to calm investors after the surprise departure of co-founder and former chief investment officer Bill Gross.
Pimco said there will be no major changes in investment strategy. The company was initially focused on trading following the announcement that Mr Gross, widely considered the most influential bond manager, was leaving for Janus Capital Group, the firm's chief executive Douglas Hodge said in an interview.
The firm has since started reaching out to clients and distribution partners around the world in a bid to prevent large-scale redemptions.
"It's business as usual," said Scott Mather, one of three newly-appointed managers of the $222bn (€175bn) Pimco Total Return Fund.
The International Monetary Fund (IMF) demanded at one stage in the global financial crisis that Ireland should raise its 12.5 per cent corporation tax rate as part of any bailout deal, it has emerged.
The demand was successfully resisted by the then minister for finance Brian Lenihan, according to a book of essays in his memory, which will be published tomorrow.
The disclosure about the IMF demand is contained in a chapter written by the long- serving Canadian finance minister Jim Flaherty, who died earlier this year aged 64.
Mr Flaherty, who served as Canadian minister for finance from 2006 until earlier this year, recalled the banking crisis that developed in the autumn of 2008 and pointed out that Ireland forms part of the constituency led by Canada at the IMF and World Bank.
Marcel Fratzscher is a man in a hurry. When the economist took over as head of Berlin’s German Institute for Economic Research (DIW) last year, the institution had let competing economists steal the limelight and shape Germany’s euro crisis debate, notably Prof Hans-Werner Sinn and his Munich-based Ifo institute. Now the 43-year-old hopes to boost the DIW’s fortunes, and his own profile, by challenging Germany’s self-satisfied status quo with The Germany Illusion, a book that warns Germany’s current economic strength is far from a long-term certainty.
In 16 punchy chapters, Prof Fratzscher challenges the established narrative of how Germany got where it is now in the hope, he says, of nudging Germany off the path of rising self-interest and back towards the common European good. Doing this, he says, means shattering three illusions.
Billionaire financier Dermot Desmond has set up a new business with up to €200 million to spend on building residential houses in Ireland.
The business, called Broadhaven Credit Partners is backed by Mr Desmond and Sankaty Advisors, a US credit specialist with $24 billion in assets under management.
Broadhaven is understood to be prepared to support credible housebuilders in Ireland, either by providing them with equity or debt, depending on individual deal requirements.
On one side of the Atlantic they’re trying to refill the punchbowl.
On the other they’re getting ready to take it away. This week investors may get a clearer idea why.
The European Central Bank will spell out on Thursday its latest attempt to steer the eurozone away from the prospect of damaging deflation, following the latest snapshot of consumer price pressures tomorrow.
US jobs numbers on Friday will probably confirm that the fast-recovering American economy has reached the point where the Federal Reserve can finally halt its massive bond-buying stimulus.
The contrast between the US and eurozone economies has grown increasingly stark, adding to the pressure on the ECB and European leaders to revive growth.
US treasury secretary Jack Lew last week laid bare Washington’s long-standing frustrations with the reluctance of European governments to increase public spending.
Euro Topics: Blocking referendum would be dangerous: The central government in Madrid wants to challenge the referendum before the Constitutional Court. But that would divide the country more than the vote itself, activist Esther Vivas writes incensed in her blog with the left-leaning online paper Público: "No sooner was the decree signed [by the President of Catalonia Arturo Mas] than the [two biggest Spanish parties] PP and PSOE reached an agreement and condemned the call for a referendum describing it as a 'rupture of society'. But I ask myself what divides society more: being able to freely express your opinion in a binding vote or banning the vote. In my opinion the answer is clear. True democracy consists in giving the citizens a choice. In this case Catalonia's inhabitants should have the choice to freely express their opinion one way or another."
Erasmus nothing more than a sex project: Roughly one million babies might have been born since 1987 as a result of the Erasmus student exchange programme, according to an European Commission study presented in Brussels last Monday. Scandalouse, the regional Islamic daily Yeni Şafak fumes: "Whether it's one million or one hundred thousand isn't so important. This project itself is a disgrace! Some European students are already calling it 'Orgasmus' instead of 'Erasmus'. A dangerous situation! Erasmus is not an educational project, but one that promotes depravity and the cult of sex, and results in a horde of sex-crazed blockheads! This heathen project draws the crème de la crème, the elites of every country, and creates uprooted, soulless, homeless, hybrid beings. They have now become the norm, and the only thing they worship is sexuality. The programme numbs and then devours the world's most brilliant offspring!"
EU Commission surprisingly attentive: EU Trade Commissioner-designate Cecilia Malmström has spoken out in favour of a change of course in the negotiations on the TTIP free trade agreement with the US. The left-liberal Austrian daily Der Standard welcomes this: "The controversial investor-state dispute settlement clause that would have given investors quick and discreet access to jurisdiction is to be scrapped. With this decision the newly emerging EU Commission is taking a surprisingly big step towards its citizens. The criticism that such dispute settlement clauses would make powerful multinationals even more powerful had recently taken on massive proportions. The secrecy surrounding the TTIP (we still don't know precisely which points are being negotiated) did the rest. The course the negotiations on the not quite as important EU agreement with Canada, Ceta, have taken is also unworthy of modern democracies. And Friday's conclusion of the negotiations in Ottawa is basically an affront. Calls for further negotiations immediately ensued."
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