22 November 2010


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I remember being in such a panic about this for so long. Men were professing a certain weakness for me at the very first blog on which I landed when finally holed up with an internet connection. They thought I was nuts, but loved me anyway. I remember the first time I heard Naomi Wolff. OMG! It felt like a bath in the water from heaven. Isn't that quaint?
US firms warn Irish over tax move
The Irish government has been given a stark warning from some of the biggest American companies in Ireland on the risk of a mass exodus if the country's low corporation tax rate is raised.
By James Quinn 9:30PM GMT 20 Nov 2010

The warning – from executives at Microsoft, Hewlett-Packard, Bank of America Merrill Lynch and Intel – spoke of the "damaging impact" on Ireland's "ability to win and retain investment" should the country's corporation tax rate be increased from 12.5%.

It came as talks between members of the Irish government and the European Union and the International Monetary Fund continued around the clock on a financial aid package of as much as €100bn to shore up the country's beleaguered banking system.

Although Brian Lenihan, the Irish finance minister, has indicated Ireland's 12.5% corporation tax rate – the lowest in the eurozone – will not be raised, a number of factions within the European Union are known to have pushed for it to be increased in return for the bail-out.

Nicholas Sarkozy, the French president, said yesterday that while raising taxes will not be a condition of the bail-out, he expects Ireland to raise its corporation tax rate: "It's obvious that when confronted with a situation like this, there are two levers to use: spending and revenues. I cannot imagine that our Irish friends, in full sovereignty, [would not use] this because they have a greater margin for manoeuvre than others, their taxes being lower than others."

The US warning was written by Lionel Alexander, president of the American Chamber of Commerce in Ireland, and a senior HP executive.

Foreign investment equates to €110bn – or 70% – of all exports with US companies alone employing more than 100,000 workers.

While the companies are not threatening to leave at this stage, the statement – signed by senior Irish executives from each of the four companies mentioned – does directly point out that although Ireland's tax rate may be low in European terms, it is not when compared with locations such as Singapore, India and China.

The letter says: "The IMF, the European Central Bank and the European Commission must realise that any increase in our corporation tax rate would ultimately make us more economically dependent, not less so on our European Union partners."

Separately, John Herlihy, head of Google's 2,000-strong European headquarters in Dublin, told The Belfast Telegraph that "anything that impinges on Ireland's competitiveness is going to be a big thing for Google".

Writing in today's The Sunday Telegraph, Mohamed A El-Erian, chief executive of PIMCO, the world's largest bond investor, also cautions that the proposed bail-out package may not be enough to shore up Ireland's finances. "Ireland and its official partners must convert a short-term liquidity approach into a more sustainable long-term solution that addresses solvency, growth and economic restructuring," he writes.

The collective warnings came as the Irish government was holding an all-day cabinet meeting today in an attempt to finalise two separate restructuring plans: a four-year plan for the economy, containing €15bn of cuts, and the other on the banking sector itself. The government is expected to publish both on Tuesday after which it is likely to formally request aid from the EU and IMF to support its austerity aims.

It seems the sale of some state assets will be included in the measures. These may include the government's 25% stake in Aer Lingus, the national carrier, as well as its National Lottery licence and the country's separate gas and electricity boards.
Can you even say "fascism" in public yet?

love, 99


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