According to Derek Scally in Berlin and Ruadhan Mac Cormaic in Dakar, French and German officials have contradicted the Government assertion that Ireland,s 12.5% corporation tax still on agenda in any negotiations over financial aid for Ireland. What this mean, That is to rise corporation tax in future. In my opinion, rising corporation tax in future will not surprise to me and I believe will happen. Why? First remember how this mess stated. According to The Irish Times dated on 22/11/2010
September 2008 ,The Government puts in place a bank guarantee to protect Irish banks. In October this is extended to subsidiaries of foreign banks operating here.
January 2009, the Government says recapitalisation is no longer appropriate to secure the viability of Anglo - Irish Bank and announces its nationalisation
December 2009, Following a harsh budget, Mr Lenihan says:"We have turned a coner...If w work together now and share the burden, we can deliver sustainable economic growth for all".
September 2010, Government discloses that total cost of anglo bailout will be 29.3 billion Euros and could rise to 33 billion Euros. Other banks bring the total to more than 50 billion Euros.
October 2010, Government proposes a four - year plan to reduce defficit by 15 billion Euros a year.
October 2010, Government announces that 6 billion Euros in cuts and taxes will be made in the December 7th budget.
November 14th 2010 ,Minister for Justice Dermot Ahern say reports of an imminent bailout from the IMF and the EU are "fiction", He adds"...absolutely nothing is taking place in respect of this".
November 16th the IMF announces it has agreed to take part in a joint IMF/EU visit to dublin
November 17th , Mr Cowen says the Government is working with "colleagues" on the "euro issue problems that are affecting Ireland.."
November 18, the IMF holds discussions with the Department of Finance and the Central Bank.
November 21, the government meets to approve formal request for assistance from the IMF and the EU.
The above chronological event explain that the current government never knew what right dicisions should be in place for Ireland economic crisis and, I believe that even new government in years ahead will not know the right cure for poor growth in todayIrish economy. They will also keep try until the EU give the new Government the ultimatum to rise corporation tax. They will rise corporation tax. However, in my opinion not corporation tax will fix Irish economy. It will fix itself from American and European economy growth. Thus Irish economy will fix itself from exports. Reduce social welfare, cut minimun wage and cut women tax 5% , these conditions from IMF are for to pay back IMF interest rates not incentives for future growth in Irish economy.
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