European Banks: What's Going On?

[Louis VI the Fat]

I dissagree we should be allowed to compete on tax you want high tax go have it for yourselves were fine as we are on that score.

I am sure Ireland is quite fine with it indeed. I, however, am not. And since Europe foots the bill for your low corporate taxes, my problem is your problem.

How do we pay? By granting full access to our internal market. So if most countries have a corporate tax rate of 25%, and Ireland has one of 10%, corporations set up their European headquarters in Ireland, conducting their business with the entire internal market from there, while the other countries voluntarily foreit these corporate taxes. This is the real transfer of funds to Ireland, dwarfing direct payments.

This is the problem with an internal market and no means of tax harmonisation. This is the stage where the EU is now, and where Ireland would be happy to keep it indefinately. EU pays, Ireland feasts.
This was great in the 80s and 90s when Ireland needed to be put on track. It is not fine with me now that Ireland is one of Europe's wealthiest counties.

Only the losers don't want to compete.

Competition is good for everybody. This, however, has got nothing to do with competition. This is assymetrical competition. The EU foots the bill for it. One is competing, the other is subsidising.
If we wanted to compete, we'd pull the plug by denying Ireland entry to the market, or raising tariffs to nullify the difference in corporate taxes. How long before Microsoft would move from Dublin to London then?


What's more, competing who is willing to lower his pants and bend over furthest for high finance is only good for finance itself. This only serves international finance at the expense of national sovereignity. The EU is also about maintaining national sovereignity against global finance.

This case, incidentally, shows what JAG and I have constantly argued over the last few months: the EU does not diminish national sovereignity, it increases it.


So much for Ireland in general. On to the more recent developments.

[Louis VI the Fat]

Is Louis infering that Ireland, despite its massive gains at being a member of the EU is giving us the middle finger and some think that this is a good thing?

Indeed I am.

Any article on how the Irish guaranteeing deposits set off something?

Let's try some Game Theory:

Scenario:
There's a room with 27 people. If nobody moves, the whole has a 50% chance to win 100 each, and the whole has a 50% chance to win 50 each. However, the first one to move, will be guaranteed 100, while all the others will then be guaranteed 50.

If nobody moves, there's a 50% chance of 2700, and 50% of 1350. If one moves, the whole group ends up with 1400.

Three questions:
What do you do? Be the first to move?
And what do you do when you have pledged economic solidarity?
And what do you do when your economic prosperity is been based on and paid for by this solidarity?

Leaving this Game again, what would be your reaction if you are one of the 26 who didn't move first?


A giant forest fire rages outside a village with 27 huts. A spark falls on the hut of Ireland. What does Ireland do? It takes the spark and tosses it right over to their neighbours, the financial powder keg of London, with the grave danger of igniting it, setting ablaze the entire village.


All for one and none for all ? Perhaps. Gah!


~~~~

Not, of course, that Ireland is responsible for the crisis. I am simply dismayed at their unilateral behaviour.
The crisis is beyond the scale of Ireland or even the EU.

[Louis VI the Fat]

Debilitating policies and internal bickering has destroyed Europe.

Germany takes hot seat as Europe falls into the abyss

We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars.

The Americans win again.

The crisis engulfing Europe, Asia and emerging markets, makes life easier for Washington. The United States is becoming a safe-haven again.

[Louis VI the Fat]

Oh well, at least we are merely collapsing. Iceland is sinking altogether:

Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country's three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won't send any more money and supplies of foreign currency are running out.


The nation's celebrated rags-to-riches story began in the Nineties when free market reforms, fish quota cash and a stock market based on stable pension funds allowed Icelandic entrepreneurs to go out and sweep up international credit. Britain and Denmark were favourite shopping haunts, and in 2004 alone Icelanders spent £894m on shares in British companies. In just five years, the average Icelandic family saw its wealth increase by 45 per cent.

But, as a result of the international banking crisis, the billionaires who own everything from West Ham United football club to the Somerfield supermarket chain, Hamleys toy shops and the House of Fraser, are in trouble and the country is drowning in debt.

Iceland's cheap labour force, the Poles and Lithuanians, have left already - there's little point in sending home such a worthless currency, and the tourist season is over.

Iceland is on its own.

I say we fasttrack Iceland's EU membership. Get them on board.



Edit: In retrospect, after reading the first few posts of this thread again it suddenly dawns on me that I needed four confusing posts merely to repeat what Banquo said in four concise sentences on page 1 already.
Owned by the Irish again? I'm getting used to it.

[Louis VI the Fat]

Huh? How did my post end up here?

Deleted and tried again.

[Husar]

Ah great, it's everyboedy for themselves now according to the Irish.

how about we expulse Ireland and Britain from the EU and start our own continental socialist free-trade unified project without them?
It's what they want, isn't it? So they can start their own little empires again with their almost nonexistant fleets.
And then we can throw Merkel out of office and watch Hypo Real Estate go bankrupt please, thank you.
Those people who are proud to play with fire, no risk, no gain, should realize what the risk part means and that the saying leaves out the negative side of that risk, which is loss.
But no, when it comes to loss, the trickle down actually works as all the loss is trickled down to the taxpayer.

[Fragony]

I hear about europe and america, why am I not hearing anything from Australia and Canada? Just not affected?

[Papewaio]

I hear about europe and america, why am I not hearing anything from Australia and Canada? Just not affected?

We have been affected. Just we had the economic brakes on for awhile now because of the huge mining boom... a kind of economic counter balance in the form of raised interest rates.

Consumer confidence is down.
The stock market is down.
Dollar is spiraling down compared with the US dollar.
Housing market is down.
Job market is ok.
ALL our major banks are making record profits and the interest rate is deregulated. Sure our Reserve Bank can set the rate, but the banks are free to ignore it. Only thing that spurs them to raise or lower is competition.

I'm sure someone with a better understanding of the Aussie economy can give a better synopsis.

[Louis VI the Fat]

Actually, I am not going to spare you all other means of calculations. How about comparing the contribution of member states with GDP per capita:

Countries with a higher GDP per capita who pay less per capita in net contribution than France:
Luxembourg, Ireland, Finland, Belgium.
Countries with a lower GDP per capita who pay more per capita in net contribution than France:
Germany.

France actually pays more per capita than four richer countries. And except for the hard-done by Germans - always paying too much for Europe - nobody who pays more than France has a lower income per capita. Or, apart from the Germans:
Everybody who is poorer than France pays less. Not everybody who pays less is poorer. Or:
Everybody who pays more than France is richer. Not everybody who is richer pays more.

France is three places higher than she ought to be according to GDP ranking. Why? Because France picks up her fair share of the bill and a little bit more on top.

[InsaneApache]

Sounds to me Louis like you're administering corporel punishment to a recently deceased equine. You almost convinced me.

[Evil_Maniac From Mars]

I hear about europe and america, why am I not hearing anything from Australia and Canada? Just not affected?

The Canadian economy is down, and it is everywhere in the Canadian news, but it is not nearly as bad as people make it out to be.

http://network.nationalpost.com/np/b...he-crisis.aspx

[Kralizec]

France is the second largest absolute contributor to the EU. Very closely behind Germany.

if you paid attention to earlier years, you'll notice that France's net contribution used to be tiny until a few years ago. In 2003 the Netherlands, a country with 1/4 of the population of France, made a larger absolute contrubition to the EU budget than France. Click
The budget is a lot more reasonable now due to long-overdue CAP and budget reforms wich France has always resisted.

If France likes to run a subsidy program to support farmers who can't make the sort of living they feel entitled to financially viable, be my guest - but don't use it as a backdoor reduction of your contribution to the rest of the EU's activities.

[Louis VI the Fat]

if you paid attention to earlier years, you'll notice that France's net contribution used to be tiny until a few years ago. In 2003 the Netherlands, a country with 1/4 of the population of France, made a larger absolute contrubition to the EU budget than France. Click

I'm afraid your link mentions net contributions. I meant simply total contribution itself. Sorry, I used the confusing term absolute contribution.
My point was, that France will either use its EU funds for income support of farmers, or she will have to get compensation from other EU funds, or there needs to be a drastic reduction of French payments. As is, France is already one of the largest net contributors, and without the CAP she will become a singularly large net contributor. This is...'unlikely' to happen.
So, one can dislike the CAP - I do too - but even scrapping it altogether will not make much of a difference to France's net contribution in the long run.

Furthermore, not to be a pest, but your link strikes me as decidedly unreliable. I mean, it's newest publication is 'The EU - Germany's Fourth Reich!!1!'


I'm sorry, but British books and sites like this are exactly what I meant in my previous post:

I'll go out on a limb and guess that you read mostly English language foreign news. In the British press, there exists a persistant image of France as forever living off EU funds

Reality, of course, does not usually correspond with what the British tabloids (from the Daily Mail to the Telegraph) write.

~~~~~


To be fair to the British press, some journalists are paying attention:

Blair 'exaggerates EU contribution'

Britain has been exaggerating its net contribution to Brussels by over £500m during its row with France about how to finance the EU.

The exaggeration was revealed in the Treasury's delayed but definitive assessment of Britain's annual contribution, an obscure official document entitled Statement on the 2005 EC Budget, which has finally been released after a request under the Freedom of Information Act.

In their negotiations with the EU, both Tony Blair and Gordon Brown have said that Britain's net contribution to the EU in 2003, the latest year for which complete numbers are available, was £3.7billion, considerably more than the £2.6billion the EU itself claims.

I want my money back! Labour has lying and spinning in Europe too!
*slams handbag on table*

[Louis VI the Fat]

Ah great, it's everybody for themselves now according to the Irish.

how about we expulse Ireland and Britain from the EU and start our own continental socialist free-trade unified project without them?

Nah, we need both countries on board. Also, it is everybody for themselves according to everybody now. No sooner had Merkel condemned Ireland's move or she did exactly the same herself. And we need not have any illusions about France. As ever, the Stability Pact only exists when it benefits France.

The problem has been quite predictable to everyone (except to that imbecile Louis who lambasted Furunculu when he posted it last week): there is an economic union, but not a political union. Each country is responsible for its own. The EU needed to have moved on to more political union, or less economical union. As it is, we have no real answer to the crisis.

The housing crisis, and the credit crisis were not of European origin, and we could weather the storm easily. Both were an American affair.
But not the banking crisis and the current complete collapse of financial confidence. These are international, and the EU is not politically equipped to deal with this conflagration. I guess neo-liberal market fundamentalism has managed to destroy its adversary, the EU, after all. Before Europe had been able to fully implement an alternative in the guise of an economy based on human dignity a more social model.

[Louis VI the Fat]

If your so annoyed about our low taxes cut your own taxes or else cut your cost simple maths

Hah! Now you're in for it. Like everybody else, I am frustrated about the crisis, and this gives me an excellent opportunity to take out my frustration by lecturing Ireland over a completely unrelated subject.


As an aside, Ireland has high income taxes, and low corporate taxes. To the point:

Ireland does not have low corporate taxes. What Ireland has, is lower corporate taxes than its competitors within the same, shared market. This is crucial. Without Irish access to EU markets, we wouldn't be having this conversation.

Why does Ireland have lower taxes than the big EU countries:

There is small country X, ten inhabitants. There is big country Y, one hundred inhabitants. There are one hundred companies who have to choose where to settle.

Small country X has 25% corporate taxes. Big country Y has 25% corporate taxes. Now, like you suggested we do, they are competing on costs, quality of workforce, innovention etc.
Ten corporations in X pay 25% of 100 profit = 250. Ninety corporations in Y pay 25% of 100 = 2250.

But, the small country profits from lowering corporate taxes, the big one does not! Like this:

Small country X has 10% taxes. Big country Y 25%.
Thirty corporations in X pay 10% of 100 = 300. Seventy corporations in Y pay 25% of 100 = 1750.

However, the reverse:
Two corporations in X pay 25% of 100 = 50. Ninety-eight corporations in Y pay 20% of 100 = 1960.

So even a small decrease in taxes lowers overall tax income for big country Y, while even a very big decrease in taxes still raises income for small country X.


See? Bigger countries don't have an incentive to lower taxes within a shared market. Smaller countries, however, do. This is why in europe, the smaller the country, the more lax the tax regime. At the bottom, there are tax parasites like Monaco, Liechtenstein, Luxembourg. As of yet, Ireland is the biggest tax parasite economy. This was fine back when Ireland was a developing economy. It is getting a bit much now that Ireland is both the EU's second richest country after Luxembourg, and, to top it all off, still one of the main beeneficiaries of EU funds. It is time for Ireland to move away from the likes of the Channel Islands, Bermuda and the Caymans, and move towards countries like Denmark or Finland.

Big countries do, however, have an incentive not to open their market to small countries. This is the assymetry I mentioned earlier. If the UK, France or Germany really wanted to compete with Ireland, instead of subsidising its development, we do not enter a tax race, we simply pull the plug. If Britain raises import tariffs that nullify the difference in tax rates, then companies would flee Ireland for Britain faster than you can say 'How's business today, mr. Gates?'. Small countries outwit bigger ones with lower taxes, big countries outwit small countries by using their weight.

The opposite of taxes, subsidies, reverses the mechanism between the small and the big country.

Small country X has GDP of 10. Big country Y GDP of 100.
Subsidies of X are 20% of GDP. Total subsidy is 2. Subsidies of Y are a mere 10% of GDP. Total subsidy: 10.
Where do companies seeking subsidies set up shop now?

This is even funnier with developing countries. It is remarkably easy for the US, Europe, or Japan and China, to cripple the market of small developing countries.
These two, subsidies and access to the internal market, are the instruments the EU, including Ireland!, uses against the Third World. We do not use them against each other within the EU. However, small countries somehow feel justified in using the reverse mechanism, taxes, against the big countries. And then whine about 'imperialist tendencies' when the big countries complain.

I don't mind, but taxes ought to be an instrument to support developing regions. If Hungary needs lower taxes at the moment, then fine with me. Ireland, not so much anymore. Ireland made good use of it in the eighties and nineties. Now it should move beyond it.
If only, because what an internal market is not suppossed to do, is to create a fantastic instrument for international capital to pit governments against each other and see which one will bend over the furthest.


As a fun fact, did you know that Ireland at one point had two tax regimes? One for Irish companies, and one, with lower taxes, for non-Irish companies. This was abolished after the EU kindly explained to Ireland that this was perhaps pushing it a bit much.

As for practical purposes, Ireland's lax tax regime has been very succesful in luring non-EU, especially American, companies to operate their European business from Ireland. One could say that the Americans enjoy near tax exempt status in Europe to stimulate the Irish economy. To put it differently, whenever I push the 'on' button on my computer, I pay Ireland to subsidise Bill Gates.
The main losers are however the British. American companies tend to prefer either Britain or Ireland, and Ireland simply out-taxes Britain. It is a massive transfer of wealth from Britain to Ireland.


~~~~~~


The above does not have anything directly to do with the current crisis. There may be a more indirect connection:
I think Ireland understands perfectly well that it benefits from the EU's current limbo. Stuck halfway in between. A functioning internal market without political integration and tax harmonisation. I think this mindset, this readiness to employ governmental measures to support the Irish economy at the expense of the other EU members, might have been a factor in Ireland's decision to unilaterally guarantee bank accounts.

[gaelic cowboy]

Hah! Now you're in for it. Like everybody else, I am frustrated about the crisis, and this gives me an excellent opportunity to take out my frustration by lecturing Ireland over a completely unrelated subject.


As an aside, Ireland has high income taxes, and low corporate taxes. To the point:

Ireland does not have low corporate taxes. What Ireland has, is lower corporate taxes than its competitors within the same, shared market. This is crucial. Without Irish access to EU markets, we wouldn't be having this conversation.

Why does Ireland have lower taxes than the big EU countries:

There is small country X, ten inhabitants. There is big country Y, one hundred inhabitants. There are one hundred companies who have to choose where to settle.

Small country X has 25% corporate taxes. Big country Y has 25% corporate taxes. Now, like you suggested we do, they are competing on costs, quality of workforce, innovention etc.
Ten corporations in X pay 25% of 100 profit = 250. Ninety corporations in Y pay 25% of 100 = 2250.

But, the small country profits from lowering corporate taxes, the big one does not! Like this:

Small country X has 10% taxes. Big country Y 25%.
Thirty corporations in X pay 10% of 100 = 300. Seventy corporations in Y pay 25% of 100 = 1750.

However, the reverse:
Two corporations in X pay 25% of 100 = 50. Ninety-eight corporations in Y pay 20% of 100 = 1960.

So even a small decrease in taxes lowers overall tax income for big country Y, while even a very big decrease in taxes still raises income for small country X.


See? Bigger countries don't have an incentive to lower taxes within a shared market. Smaller countries, however, do. This is why in europe, the smaller the country, the more lax the tax regime. At the bottom, there are tax parasites like Monaco, Liechtenstein, Luxembourg. As of yet, Ireland is the biggest tax parasite economy. This was fine back when Ireland was a developing economy. It is getting a bit much now that Ireland is both the EU's second richest country after Luxembourg, and, to top it all off, still one of the main beeneficiaries of EU funds. It is time for Ireland to move away from the likes of the Channel Islands, Bermuda and the Caymans, and move towards countries like Denmark or Finland.

Big countries do, however, have an incentive not to open their market to small countries. This is the assymetry I mentioned earlier. If the UK, France or Germany really wanted to compete with Ireland, instead of subsidising its development, we do not enter a tax race, we simply pull the plug. If Britain raises import tariffs that nullify the difference in tax rates, then companies would flee Ireland for Britain faster than you can say 'How's business today, mr. Gates?'. Small countries outwit bigger ones with lower taxes, big countries outwit small countries by using their weight.

The opposite of taxes, subsidies, reverses the mechanism between the small and the big country.

Small country X has GDP of 10. Big country Y GDP of 100.
Subsidies of X are 20% of GDP. Total subsidy is 2. Subsidies of Y are a mere 10% of GDP. Total subsidy: 10.
Where do companies seeking subsidies set up shop now?

This is even funnier with developing countries. It is remarkably easy for the US, Europe, or Japan and China, to cripple the market of small developing countries.
These two, subsidies and access to the internal market, are the instruments the EU, including Ireland!, uses against the Third World. We do not use them against each other within the EU. However, small countries somehow feel justified in using the reverse mechanism, taxes, against the big countries. And then whine about 'imperialist tendencies' when the big countries complain.

I don't mind, but taxes ought to be an instrument to support developing regions. If Hungary needs lower taxes at the moment, then fine with me. Ireland, not so much anymore. Ireland made good use of it in the eighties and nineties. Now it should move beyond it.
If only, because what an internal market is not suppossed to do, is to create a fantastic instrument for international capital to pit governments against each other and see which one will bend over the furthest.


As a fun fact, did you know that Ireland at one point had two tax regimes? One for Irish companies, and one, with lower taxes, for non-Irish companies. This was abolished after the EU kindly explained to Ireland that this was perhaps pushing it a bit much.

As for practical purposes, Ireland's lax tax regime has been very succesful in luring non-EU, especially American, companies to operate their European business from Ireland. One could say that the Americans enjoy near tax exempt status in Europe to stimulate the Irish economy. To put it differently, whenever I push the 'on' button on my computer, I pay Ireland to subsidise Bill Gates.
The main losers are however the British. American companies tend to prefer either Britain or Ireland, and Ireland simply out-taxes Britain. It is a massive transfer of wealth from Britain to Ireland.


~~~~~~


The above does not have anything directly to do with the current crisis. There may be a more indirect connection:
I think Ireland understands perfectly well that it benefits from the EU's current limbo. Stuck halfway in between. A functioning internal market without political integration and tax harmonisation. I think this mindset, this readiness to employ governmental measures to support the Irish economy at the expense of the other EU members, might have been a factor in Ireland's decision to unilaterally guarantee bank accounts.

The majority of Irish companies do little or or no business within the Eurozone at least the continental side at the moment.
We trade mainly with US and UK both of these are as much an historical accident as they are a concious policy.

Correct UK suffers but interestingly UK has moved up the ladder of jobs its a main hub of finance and aerospace tech it has a car industry in short UK has very high value wealth creating industries what little is lost is gained by the strong services bent of the UK economy in short selling things we built for them. We sell to them but they sell far more to us I can watch BBC tv read the Sun eat english baked beans wear UK clothes all products that have counterparts here in Ireland but which I can buy at the smallest shop in Ireland. This is good for the consumer and I do not wish to reverse this trend.

How does our low corporate tax affect your business if these companies come here and trade with US/UK you in France lost no business only jobs and if the company was unwilling to pay your rates what would you prefer that the jobs be completely lost to Europe.

Dont even bother spinning that old protection racket either that was got rid of because of the EU in the first place now you want to bring it back.

When jobs wages etc etc were protected France or Ireland did not have some kind of nirvana where we all had jobs and our economies were strong quite the reverse we in Ireland were on the front of the economist as the poorest of the rich.

Interestingly you wish to reverse the open market we all enjoy which of course would affect you more than me Ireland buys lots of French products but they tend to be high value luxury ones precisely the very products that suffer under protectionism.

How many times have we seen the US talking economic patriotism in relation to French wine and cheese when US/EU has a trade duspute.

You claims that we undercut you and then sell to the shared market are not correct we as I already stated sell more to Anglo Saxon world and also we suffer in that one of the products we can produce cheaper than anyone which is beef its opened to any and all comers including France

If the EU does go to a super state with a president etc etc a Fed like ECB why should the tax be at Frances rate who said your tax rates are the norm in the EU or even Euro why should any country raise it to your level to allow you to keep your high costs safegaurded.

I already see you claiming that it hollows out your economy well if a tax break in Ireland hurts France a country of many millions it can hardly be a very robust economy to start with.

France would hardly need the high tax if it didnt pay itself so well in its social programmes.
We dont pay high tax but we still pay huge ammounts into social programmes anymore would just be gobbled up with no discernable improvement in services.

Incidently our taxes on actual goods are high we spend far more on the same bag of groceries than you this is how we pay for those inefficient social provisions we have.

If as you claim big countries use their weight against small then only the UK/US exhibit this France has weight but its not muscle its flab

[gaelic cowboy]

Were all getting sidetracked here or at least I am so I will refrain from commentating more on our tax regime unless a topic is opened at some time in future.

So returning to the actual topic news today is the Irish bank deal may now exclude foreign Irish banks. Which is bad for any squaddies in UK as they have some deal with the post office I believe and this in turn has a deal with Bank of Ireland so our deal safeguarded English soldiers deposits

The claim Louis that we purposely chose a blanket deal is a bit too conspiratorial for me the reality is a fire broke out and someone quickly grabbed a bucket of water.

The government is going to charge for this deal by the way its not free you know but so far no one has actually applied yet I believe but I could be wrong.

Foreign banks with a high street presence in Ireland can also avail so Halifax is covered here even though it crashed and burned in the UK.

Now that all countries seem to be doing either variations on a theme we could be lucky and avert a Eurowide collapse.

[JR-]

blah..............................................

ireland is not a parasite, it is a sovereign nation with a representative gov't that makes its own choices on how it taxes its citizens and other economic activity.

if other nations don't like that then quite frankly, screw them!

petulant continental nations that feel hard done by because little paddy can run faster in the race should realise he gets that advantage because he didn't waste his time and money eating sweaties.

one of the reasons why i want nothing to do with political integration with the continent is because i don't want anyone telling us how to do things, so i'll be damned if i'll stand by and watch it happen to ireland either.

none. of. the. continents. effing. business.

[Louis VI the Fat]

ireland is not a parasite, it is a sovereign nation with a representative gov't that makes its own choices on how it taxes its citizens and other economic activity.

if other nations don't like that then quite frankly, screw them!

petulant continental nations that feel hard done by because little paddy can run faster in the race should realise he gets that advantage because he didn't waste his time and money eating sweaties.

one of the reasons why i want nothing to do with political integration with the continent is because i don't want anyone telling us how to do things, so i'll be damned if i'll stand by and watch it happen to ireland either.

none. of. the. continents. effing. business.

Yes it's my business because I share the bill.


Sharing a house with people and trying to decide on rules is fine.
Not sharing a house is fine too.
Sharing a house with others only to curse at them that it's none of their business what you do 'in your own house' is not fine.

[Banquo's Ghost]

My esteemed colleagues, let us desist from such rancour. Not in front of the Americans, what?

I am ashamed that my little teasing of Louis - meant good-naturedly - has sparked such sharp words. Please accept my apologies.

Nonetheless, some good points have been made, but I fear Ireland's place in all this has been a little misrepresented. Important though we are made to feel by the blame cascading down upon our shoulders, the truth is that the Republic's actions were forced upon her by the United Kingdom. By nationalising the Northern Rock, the British created a rock-solid, government backed savings institution on our doorstep - in essence guaranteeing deposits months before we did. It was therefore rather rich to hear Gordon Brown bemoan our necessary response as capital outflows increased.

As to the wider point, I agree in principle with Louis. The failure here has been the lack of a political leadership of Europe to match the financial integration. The European Central Bank cannot provide the budgetary clout that the US government has been able to command. Inevitably then, the individual soveriegn states will do what is best for their own nations, and in some cases, act quickly rather than in concert.

The reason this political union does not exist is not because of Ireland's referendum, but because such a union has to have democratic accountability. This is why the Lisbon Treaty was rejected as a bureaucrat's charter.

Look at the outrage enflamed in the United States by citizens distrustful of the elected politicians, and tremble. This is democracy, and held, for a time their Congress to account - but Congress still delivered considered leadership against the purely populist.

A government of Europe constituted by the Lisbon Treaty would have been made up of appointees with no direct mandate, answerable only to the big powers. Such disenfranchised anger from the governed then would have utterly wrecked the union, for all time.

Until the elite recognise this, and all the future fault lines that lie with disenfranchising the people of Europe, there will be, there can be, no Union.

[Oleander Ardens]

Stocks in every corner of the world get hammered, some less some more deeply into oblivion. I can consider myself lucky and unlucky because I reduced the % of stocks my portfolio close to 0 in mid 2007. Sadly I bough stocks with 1/3 of the available cash two months ago in European stocks and some commodities. Nothing you can do about it right now. Everything seems to be the selling list, even the most profitable companies with P/Es around 5 and a very high cash-flow per stock and not too grim outlooks. If you read that the average investment fond has almost 40% still in stocks go figure how much they lost.

Credit markets are frozen deserts now with a almost no movement to be spotted. Cut your spending drastically because you will get only money with good credentials and at high expense. Americans ready yourself for a deep recession, Europeans, be prepared to confront a recession and Asians, be assured that growth will be slow.

[Louis VI the Fat]

Aye, too much focus on Ireland. It was altogether not that important, and the tax issue is distracting this thread.


More importantly, a common policy has been agreed upon. How long will it last and will it be at all sufficient to quench fears and panic?

European Union finance ministers have agreed to increase the guarantee for customers' bank savings accounts to at least 50,000 euros ($68,250; £38,900).

The ministers reached agreement at emergency talks on the financial crisis in Luxembourg. They also agreed to support big banks in trouble in order to protect the financial system. "We have agreed to support systemic financial institutions," deputy German finance minister Joerg Asmussen said.

Until the outbreak of the turmoil in the financial sector, most EU governments guaranteed consumer savings of up to 25,000 euros. However, several countries wanted to raise the minimum guarantee even higher than 50,000 euros - to 100,000 euros. Countries such as Greece and Ireland have already issued blanket guarantees for savers.


French finance minister, Christine Lagarde, who chaired the meeting, said: "We wanted to find a common position to strengthen our coordination - we have succeeded." "We have reiterated our determination to guarantee the stability and solidity of the banking system, " she added. The ministers from the 27 member states hope their measures will bolster money markets after a day of panic on Monday saw huge share index losses in Germany, France and the UK.

A $700bn US bank bail-out and moves by several EU states to help their banks have not quelled fears. European and Asian markets were volatile on Tuesday as investors worried global government action may not resolve the crisis. Banking stocks dragged European share markets lower initially, but by early afternoon most indices had reversed earlier falls to edge ahead slightly - the UK's main FTSE 100 index was up 1.2%, while France's Cac 40 was 1.5% higher.


Since late last week, Ireland, Germany, Greece, Austria and Denmark have declared separately that money held by ailing banks will be safe. Analysts say the move had angered fellow EU member states who feared it could prompt savers to transfer their money into guaranteed institutions.

Europe's fragmented response to the crisis has so far has done little to reassure investors, correspondents say.

~~~~~

Meanwhile, Iceland is not looking to the EU. not to America either. But...to Russia.

[HoreTore]

Well, even if my bank fails, all of my savings are still protected

Gotta love Big Government...

[gaelic cowboy]

Well, even if my bank fails, all of my savings are still protected

Gotta love Big Government...

big goverment save me please lets all go for couple of beers like I did tonight gotta love those first year college girls credit crunch is that a new type of mars bar.

[gaelic cowboy]

I am sure Ireland is quite fine with it indeed. I, however, am not. And since Europe foots the bill for your low corporate taxes, my problem is your problem.

How do we pay? By granting full access to our internal market. So if most countries have a corporate tax rate of 25%, and Ireland has one of 10%, corporations set up their European headquarters in Ireland, conducting their business with the entire internal market from there, while the other countries voluntarily foreit these corporate taxes. This is the real transfer of funds to Ireland, dwarfing direct payments.

This is the problem with an internal market and no means of tax harmonisation. This is the stage where the EU is now, and where Ireland would be happy to keep it indefinately. EU pays, Ireland feasts.
This was great in the 80s and 90s when Ireland needed to be put on track. It is not fine with me now that Ireland is one of Europe's wealthiest counties.



Competition is good for everybody. This, however, has got nothing to do with competition. This is assymetrical competition. The EU foots the bill for it. One is competing, the other is subsidising.
If we wanted to compete, we'd pull the plug by denying Ireland entry to the market, or raising tariffs to nullify the difference in corporate taxes. How long before Microsoft would move from Dublin to London then?


What's more, competing who is willing to lower his pants and bend over furthest for high finance is only good for finance itself. This only serves international finance at the expense of national sovereignity. The EU is also about maintaining national sovereignity against global finance.

This case, incidentally, shows what JAG and I have constantly argued over the last few months: the EU does not diminish national sovereignity, it increases it.


So much for Ireland in general. On to the more recent developments.

All this is just a load of Big countries afraid cos the EU is not doing what they thought it would do which was perpetuate there power and influence since you only just woke up to it all you want someone to blame enter Ireland and the newer eastern members for any problem you can think of.

If your so annoyed about our low taxes cut your own taxes or else cut your cost simple maths.

We have low tax but in other area we may suffer as regards infastructure we will never be able to satisfy 100% of a prospective companies needs which is why companies do not just base everything on tax rates.

We have a high worker cost but low tax it evens out go cool of your socialist dogma on co-operation which is really code for hey thats not fair give me my ball back.