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News : Irish Last Updated: May 21, 2013 - 12:14 PM

Tuesday Newspaper Review - Irish Business News and International Stories - - May 21, 2013
By Finfacts Team
May 21, 2013 - 9:37 AM

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Irish Independent:

APPLE has been accused by two of America's most senior politicians of using Ireland to help cut its global tax bill to almost zero.

The head of the world's biggest technology company faces a grilling in Washington today over what politicians there claim are "gimmicks" used to get around US tax laws.

Apple paid almost no tax on earnings of more than $100bn over four years, US Senator Carl Levin and former presidential candidate John McCain claimed last night.

The news threatens to be the latest blow to this country's international standing in the wake of UK investigations into Google's tax affairs.

One Apple subsidiary incorporated in Ireland paid no tax anywhere on a staggering $30bn of revenue between 2009 and 2012, the senators claim.

IRELAND'S booming exports are seen as the main evidence that our bailout is the only one that can be called a success.

In recent days, Bank of Ireland shareholder Wilbur Ross and the influential Brussels-based think-tank Bruegel have highlighted structural strengths in the Irish economy to differentiate the economy here from moribund rivals elsewhere in Europe.

The proof for that is seen to be our ability to compete in international markets by selling goods made here.

"The Irish programme seems to have been successful," Bruegel said in a report looking at the effectiveness of bailouts.

"At the time of writing, Ireland is on track to exit the three-year programme and regain access to financial markets on time, though subject to risks."

Finfacts: Apple and Google provide lots of fake exports through tax-related diversions of revenues. See here and here.

US investor Kennedy Wilson has been named as the preferred bidder to buy a €300m portfolio of Irish commercial property being sold by creditors of the former Treasury Holdings.

Bondholders owed €375m secured on the properties will vote on the all-cash offer from Kennedy Wilson in June after a sub-committee rejected rival shortlisted bids from Britain's London & Regional and from Northwood Investors, a property fund set up by former Blackstone real-estate head John Kukral.

The bids are for a portfolio of 16 buildings that include the Stillorgan Shopping Centre in Dublin, Merchants Quay Shopping Centre in Cork, and a plethora of high-end office blocks that include Bank of Ireland's headquarters on Mespil Road, FAS's offices on Baggot Street, and KPMG's main Dublin offices.

Irish Times

Ryanair is in talks with Dublin Airport about the possibility of launching new services from there – indicating a possible thaw in relations between the two.

In its annual results statement yesterday, the airline said it was in “active discussion with the new owners of Stansted Airport and the new management at Dublin Airport” about the possibility of expanding services from either base by September this year.

Ryanair chief executive Michael O’Leary has consistently criticised the Dublin Airport Authority (DAA) and its predecessor, Aer Rianta, over high charges and aimed a number of broadsides at it and the Department of Transport in its 2012 results statement.

However, deputy chief executive Howard Millar said yesterday that the airline had met the DAA’ s new head, Kevin Toland, and Stansted’s new owners, Manchester Airports Group.

Innovation is key to kick-starting growth and helping economic recovery, delegates were told at the Open Innovation 2.0 Conference in Dublin Castle yesterday.

The two-day programme brings together academics, business figures and politicians, recognises leading innovators and features a free technology showcase at the Mansion House.

Minister for Jobs Richard Bruton called on attendees to recognise the transformative potential of innovative ideas.

“It’s not just about the money, it’s about innovation for society, for people”, Mr Bruton added.

The backlash against corporate tax avoidance could end up costing Britain jobs and investment, a treasury minister has warned, as David Cameron outlined plans for international action on closing loopholes at a meeting with Eric Schmidt, Google’s chairman, and other business leaders.

The warning came as retailer Marks & Spencer became the latest in a line of UK based companies to have the spot-light shone on its tax-practices.

Exchequer secretary David Gauke said the government was trying to attract investment by lowering the corporate tax rate, despite growing debate over whether multinationals such as Google and Starbucks pay enough UK tax.

The drive for greater tax competitiveness had so far attracted very little public opposition, he said, but this could change if anti-business sentiment hardened.

His comments came as Mr Schmidt attended a meeting of the prime minister’s business advisory group, of which he is a member, days after Google was accused by a parliamentary committee of “devious, calculating and unethical” behaviour in its UK tax arrangements.

Irish Examiner

Mortgage lending slumped to €331m for the first quarter of this year, well down on the €450m lent in the same period in 2012.
The Irish Banking Federation/PwC Mortgage figures show that 2,068 new mortgages were issued in the first three months of the year.

This compared with 6,043 issued in the final quarter of 2012, valued at €999m and 2,630 mortgages with a value of €450m in the first three months of last year.

The study found that the key home purchaser segments of the market — first-time buyers and mover purchasers — continue to dominate the market accounting for over 80% of new mortgages issued. In effect, almost 90% of all mortgage credit now goes to the home purchasing sectors of the market.

The IBF’s director of public affairs Felix O’Regan said: “The lower level of new mortgage lending recorded in the first quarter comes as no surprise and has been well flagged in the monthly approvals figures published by IBF during the quarter. It reflects a front-loading of activity into Q4 2012, ahead of the ending of mortgage interest relief, as well as the traditional seasonal weakness generally seen at this time of year.”

Ireland may benefit from the increase in wages in China as a growing number of companies look to bring manufacturing back to their core markets.

Hourly wages in China have increased by over 400% since 2001 and, coupled with the time difference and an average shipping time of six weeks, the attractiveness of manufacturing in the East may diminish for some sectors.

The Cork Electronics Industry Association will hear from Caroline Dowling, president of integrated network solutions at Flextronics, who believes now is the time to bring manufacturing industries back to Ireland.

“This is an ideal time for Ireland to harness the opportunity that re-shoring presents,” she said.

“Manufacturing has evolved and we are continuously reinventing our business processes in line with technological developments, client needs, and customer demands.

“As the design and manufacturing process becomes more sophisticated, customisation and final configuration closer to the market is desirable and often necessary.”

Enrico Giovannini, Italy's employment minister, on Monday announced a €12bn plan – half coming from EU funds – to create 100,000 jobs for people aged under 24 people, as part of a plan to cut youth unemployment by 8 per cent.

The measures, which should be ready by June, will not include the reductions in labour costs demanded by analysts and employers, but focus instead on easing short-term contract regulations and partially undoing reforms introduced by Mario Monti’s government.

With figures showing one in five young Italians is unemployed, the government is trying to follow initiatives taken elsewhere in Europe, but the issue could prove a divisive and dangerous one for the fragile coalition, warns La Repubblica.

Antonio Tajani is European commissioner for industry, a sector that has been hit hard by the crisis, and one which several member states are hoping will play a central role in their recovery. On the sidelines of the International Journalism Festival in Perugia, Italy, he told presseurop about the EU’s recipe for economic recovery, the crisis affecting the Union’s relationship with its citizens, and his vision for the future of Europe.

Der Spiegel says Europe is failing in the fight against youth unemployment. While the German government's efforts remain largely symbolic, Southern European leaders pander to older voters by defending the status quo.

Stylia Kampani did everything right, and she still doesn't know what the future holds for her. The 23-year-old studied international relations in her native Greece and spent a year at the University of Bremen in northern Germany. She completed an internship at the foreign ministry in Athens and worked for the Greek Embassy in Berlin. Now she is doing an unpaid internship with the prestigious Athens daily newspaper Kathimerini. And what happens after that? "Good question," says Kampani. "I don't know."

"None of my friends believes that we have a future or will be able to live a normal life," says Kampani. "That wasn't quite the case four years ago."

Four years ago -- that was before the euro crisis began. Since then, the Greek government has approved a series of austerity programs, which have been especially hard on young people. The unemployment rate among Greeks under 25 has been above 50 percent for months. The situation is similarly dramatic in Spain, Portugal and Italy. According to Eurostat, the European Union's statistics office, the rate of unemployment among young adults in the EU has climbed to 23.5 percent. A lost generation is taking shape in Europe. And European governments seem clueless when they hear the things people like Athenian university graduate Alexandros are saying: "We don't want to leave Greece, but the constant uncertainty makes us tired and depressed."

Instead of launching effective education and training programs to prepare Southern European youth for a professional life after the crisis, the Continent's political elites preferred to wage old ideological battles. There were growing calls for traditional economic stimulus programs at the European Commission in Brussels. The governments of debt-ridden countries paid more attention to the status quo of their primarily older voters. Meanwhile, the creditor nations in the north were opposed to anything that could cost money.

In this way, Europe wasted valuable time, at least until governments were shaken early this month by news of a very worrisome record: Unemployment among 15- to 24-year-olds has climbed above 60 percent in Greece.

Suddenly Europe is scrambling to address the problem. Youth unemployment will top the agenda of a summit of European leaders in June. And Italy's new prime minister, Enrico Letta, is demanding that the fight against youth unemployment become an "obsession" for the EU.

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