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Friday Newspaper Review - Irish Business News and International Stories - - October 17, 2014
By Finfacts Team
Oct 17, 2014 - 11:54 AM

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Irish Independent

The budget was a "missed opportunity" for Ireland to further reduce its debt pile, Moody's has said.

The credit ratings giant said that by easing up in the Budget, the Government has left the public finances more vulnerable to "unexpected shocks".

Moody's, which upgraded Ireland's rating twice in less than six months this year, said the Government had outlined a "mildly expansionary" Budget.

However, it was "a missed opportunity for Ireland to further reduce its elevated debt levels, which remain a key source of vulnerability".

Moody's also warned that the potential exit of foreign companies as a result of the closure of the 'Double Irish' tax scheme poses a "significant risk to Ireland's growth and fiscal outlook". However, it added that it did not expect that its six-year phasing-out would result in a major exodus of multinationals, especially as the Government is looking to introduce another tax incentive in the guise of the "knowledge box".

"Following four years of budgetary out-performance, we believe the Irish government will meet its deficit target again in 2015," the ratings agency said in its latest credit outlook report.

THE Government's new "knowledge box" tax incentive scheme for multinationals looks set to come under an EU review of such regimes designed to establish whether they breach State-aid rules.

Earlier this year, the Ecofin Council made up of EU finance ministers ordered the Commission to launch a review such incentives and it is already examining schemes in countries like the UK, Belgium, Spain and France with Ireland set to come under the spotlight.

Finance Minister Michael Noonan announced the "knowledge box" tax incentive scheme for multinationals in Budget 2015 this week alongside plans to abolish the so-called "double Irish" tax loophole.

Apple Inc's faster, slimmer iPads come with modest improvements, such as a fingerprint sensor, but some analysts say it offers few other features to wow consumers ahead of a holiday shopping season expected to be swamped by mobile devices.

At a launch event on Thursday, Chief Executive Tim Cook called Apple's new line-up, which includes a new iMac computer with a "5K retina" or high-end display, the company's best ever. But analysts say Apple may struggle to arouse the same passion for its tablets as in past years among consumers faced with an abundance of hand-held, touch-screen devices.

"I've got to be honest and say, the only impressive thing was the 5K retina display on the iMac," said Gartner analyst Van Baker, who attended the show at Apple's headquarters in Cupertino, California. "The other things we saw (included) just iterative improvements on the iPad."

Irish Times

Within 30 minutes of Minister for Finance Michael Noonan announcing the end of the “double Irish” tax loophole in Tuesday’s budget, the European Union’s commissioner for taxation was asked by journalists in Luxembourg for his view.

His response was telling. The Irish decision to abolish the loophole was proof the EU’s decision to put tax on the agenda gets results, commissioner Algirdas Semeta said.

The OECD in Paris was equally laudatory, welcoming Ireland’s “smart and courageous” move.

Irish officials are examining the feasibility of a 6.25 per cent rate on a new corporate tax scheme as the Government moves to shore up inward investment after its decision to scrap the controversial “Double Irish” mechanism.

While this is one of several options under discussion, such a rate would apply to a new “knowledge box” scheme in which a preferential rate would be levied on assets such as patents which are managed from Ireland and located here.

Minister for Finance Michael Noonan said in the budget on Tuesday that he was initiating a public consultation on the development of such a scheme in anticipation that it could be introduced in the Finance Bill next year.

The sale of a key building on Hanover Quay by the Dublin Docklands Development Authority to rock band U2 for about €450,000 has been labelled “questionable” at a hearing of the Oireachtas Public Accounts Committee (PAC).

The authority has acknowledged the sale of the freehold on No 16 Hanover Quay was not advertised on the open market but has said it was “satisfied the sale process had achieved an open-market price in line with guidance for the sale of such assets”.

The authority, which is being scrapped by the State, said auctioneers Lambert Smyth Hampton, acting on its behalf, and Jones Lang LaSalle, for U2, had brokered the deal. U2 is understood to have an interest in the property as a music studio.

Irish Examiner

Budget 2015 ignored the needs of the self-employed and provided no support for entrepreneurship, the majority of business leaders believe.

A post-budget survey conducted by the Institute of Directors in Ireland shows that 54% believe the measures announced by Finance Minister Michael Noonan on Tuesday offer no support to entrepreneurs while a greater proportion, 71%, say the budget delivered no improvements for self-employed workers.

Despite the clear perception among company directors that Budget 2015 fell short of what was required in supporting entrepreneurship and self-employed workers, the majority believed it would deliver improvements for business and the domestic economy — and would boost international confidence in Ireland.

Europe

Euro Topics: The weak growth of the global economy and low inflation in the Eurozone prompted investors to sell shares on a massive scale on Thursday again. The euphoria on the markets has long stood in stark contrast to the real economy situation, commentators point out. They call on Europe's politicians to combat the threat of another recession with reforms and economic stimulus measures.

Investors' euphoria was unjustified: The stock markets' downward slide was predictable because the investors' euphoria had nothing to do with the real economy, the liberal business Italian daily Il Sole 24 Ore comments: "Forget the return of the Greek crisis or the US's departure from its expansive financial policy, the spectre of deflation in Europe or the upcoming stress tests for Europe's banks. The real reason is that share and bond markets all over the world rose carelessly in recent times. Investors put their faith in an economic boom and financial stabilisation in Europe that are anything but certain. ... The tumbling markets are simply the final proof of the huge gap that now exists between the world of finance and the real economy. In other words it is confirmation of the fact that the only response [to the economic crisis] has come from central banks. They have pumped huge and unprecedented amounts of cash onto the markets and driven them ever higher."

Stock market tumble comes as no surprise: The drop on the stock markets is no reason for panic, the liberal daily La Libre Belgique writes: "The tumble can't be put down to one specific event, but rather an indigestible cocktail of bad news. ... Even China is showing signs of running out of steam. In short, there is no end of problems dogging the global economy. If you add to that the hyper-sophisticated market operations that aggravate price volatility, there's nothing surprising about the current correction. It brings to mind the saying on the markets that 'trees don't grow tall enough to reach the sky'. But we know that fear is a poor advisor. The worst thing would be if the economic players' incertitude were exacerbated by the feeling that the states, governments and central banks are unable to influence events."

EU won't tolerate Cameron's anti-immigration plans: British Prime Minister David Cameron announced on Thursday that he would have "one last go" at limiting immigration from other EU countries. He doesn't stand a chance with that in the EU, the conservative daily The Times warns: "Mr Cameron knows that curbing freedom of movement within the EU would require the unanimous approval of other member states. That looks highly unlikely. ... It is one thing for Mr Cameron to have a tough-minded negotiating stance with Britain's partners. That is to be applauded. But there is no strategic sense in making a demand that he knows in advance will not be accepted. If it were, it would be a positive invitation to Spain, France and other EU governments to curb migration by British nationals. The 700,000 Britons in Spain might find themselves looking for somewhere else to live."


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