Forming the inevitable coalition is the easy bit

 No surprises here..

The new Fine Gael-Labour coalition government is planning to impose a property tax on family homes, to freeze income taxes and to review the universal social charge.

Sources close to the negotiations revealed that Michael Noonan, the former Fine Gael leader, will be the next minister for finance

The negotiators have also agreed to bring the exchequer deficit within EU guidelines by 2015 — a widely-expected compromise between Fine Gael’s proposal of 2014 and Labour’s preferred date of 2016.

We wait to see whether the  programme for government has to say to make such a “ compromise”“ meaningful.

And what next for the bailout?

Meanwhile, German chancellor Angela Merkel has taken a hard line on demands from Mr Kenny for better bailout terms, saying she expects concessions in return for any easing of the EU-IMF deal.

Dr Merkel and Mr Kenny had a brief “informal” meeting in Helsinki last night at which she congratulated him on his election victory.

A spokesman for Mr Kenny said the discussion “went well”, but the chancellor made it clear she expects reciprocal measures if bailout recipients are granted “relief” by their euro zone partners.

“It will be always about taking and giving. It does not make sense to help one country if there are no new conditions on another issue,” she said.

The chancellor also said “there’s no use in offering relief” unless “conditions get tougher” for the countries that seek it. “On this basis, we’ll talk with these countries.”

Mr Kenny’s spokesman said the two leaders “didnt get into that level of detail” when asked whether Dr Merkel had specified what she wanted in return for better bailout terms. While Irelands corporation tax regime has been a frequent target of German criticism, Mr Kenny said he would be making no concessions on that front.

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  • Greenflag

    What Mr Kenny ought to do is to send Kanzler Merkel a copy of the statement made by the Governor of the Bank of England Mr Mervyn King as reported in this BBC link.

    http://www.bbc.co.uk/news/business-12655035

    and the ‘dirt’ behind Project Merlin .

    http://www.bbc.co.uk/news/business-12655347

    The Germans have their own bank problems and the Kanzlerin has her own ‘domestic’ politics but for sheer crass or as the judge in the case called it ‘bizarre banking ‘ who has heard or even read of the story this week of the Monaghan ‘grocer’ who was turned down for ‘property expansion ‘ loans by all the Irish banks but who was given some 40 million euros to build his dream shopping mall by those most careful and cautious and prudent world renowned bankers -the Swiss ???

    Once again my eyes don’t see what my ears hear and vice versa in the matter of banking and financial services chicanery . Governor Mervyn King has hit the right note but how long before he is rapped on the knuckles for his ‘incendiary ‘ speech by the eh ‘dynamic duo heroes of enterprise’ and the Big Society -Cameron Clegg or even shunted into early retirement .

    In essence what Merkel is saying is show me the blood on the streets of Dublin or 250,000 unemployed Irish construction workers throwing bricks at the glass domed Reichstag and I’ll have another look . Meanwhile I have to find a new Defense Minister as Von Gutenberg my heir apparent has had his doctorate removed for plagiarising his doctor’s thesis and forced into resignation.

    But now a question and if anyone out there has an answer please share it . If Irish corporation tax rates were the same as the average for the EU how much extra revenue would that bring in to the Revenue and how much faster would the State be relieved of it’s debt -assuming of course that all of the corporations don’t flee the State and add another 100,000 onto the already burdened unemployment costs ?

    Noonan is enough of a Limerick ‘thug’ to be credible with criminal bankers be they German , British or French or even ‘bizarre ‘ Swiss .

    But as for the banks being too big to fail ? Those words are not being uttered by the world’s top politicians -neither Obama , Cameron or even Merkel any more and even Sarkozcy has been neutered .

    Vote Goldman Sachs No 1 and Bank of America No 2 in the election .You might as well 🙁

  • Greenflag

    Newsflash

    Noonan neutered at starting gate ‘

    ‘It is understood that the Department of Finance will be split into two parts.
    One ministry will handle fiscal planning and the banks. The other will deal with public service reform and the estimates process.
    Labour will occupy one of those departments and Fine Gael the other, with Labour tipped for public service reform.’

    An Irish ‘solution ‘ to the Irish problem . Translated into plain English what it means is FG will be allowed to continue to kiss the rear ends of the banks while Labour will be allowed to perform a similar service on the same body part of the public sector unions .

    Meanwhile the ‘country ‘ will be allowed to emerge from it’s current ‘dysfunction ‘ by the old reliables – mass emigration of it’s young people and squeezing more tax out of everybody bar the banks 🙁

    I guess the ‘discussions’ on coalition took a week in order to give a good impression on the seriousness and earnestness of same .And all it took in the end was a simple division of the spoils by two ?

    I wonder will all the other Ministries be divided in two so as to placate the Ministerial ambitions of both parties ?

    Am I alone in getting a whiff that while Northern Ireland and it’s byzantian power sharing is geographically very close to Dublin -it has suddenly become a lot closer politically .

  • Brian Walker

    Pulbic service reform is no doubt a great cause. It is located in the UK in the Cabinet office and cross cuts all departments. But as for the Exchequers, both UK and Irish, the bean counters have it. The Irish deal is an elegant one, not unlike the Conservatice Chancellor and Lib Dem Chief Secretary but with a different role for the minor coalition partner.

  • Mack

    But now a question and if anyone out there has an answer please share it . If Irish corporation tax rates were the same as the average for the EU how much extra revenue would that bring in to the Revenue and how much faster would the State be relieved of it’s debt -assuming of course that all of the corporations don’t flee the State and add another 100,000 onto the already burdened unemployment costs ?

    I’m guessing this is rhetorical. But on the off chance it isn’t.

    Ireland actually takes in above EU average amounts of corporation tax. Many US multi-nationals have their EMEA (Europe, Middle East, Africa) headquarters here for tax purposes. This gives them a tax advantage over European multinationals headquartered elsewhere (so European multinationals are lobbying Merkel and Sarkozy to get them to force Ireland to give up our corporation tax rate) .

    If we brought our corporation tax rates up to 30% or so, there would be no reason whatsoever for US multi-nationals to book profits earned throughout the EMEA region in Ireland ahead of any other country in Europe. Given the size our market, high labour costs (relative to Poland, Spain, Portugal etc) and general clout at EU level (very low compared to France, Germany etc – should this come to pass – no doubt the French and Germans would retain all their loop holes that allow them to lower their effective rate of corporation tax) I think we can reasonably confidently predict that this would lower Ireland’s corporation tax take, and also probably our income tax take, capital gains & acquisitions taxes, VAT, excise duties etc.

  • Greenflag

    Mack,

    Thanks and no it was’nt rhetorical . Your explanation throws up the not very well known ‘unknown ‘ i.e ‘the loop holes that the French and Germans can retain by virtue of economy size ‘

    Thus what your explanation suggests is that for Merkel and or Sarcozcy or Cameron to demand Ireland’s corporate tax rates to be increased -is nothing less (at this particular time anyway ) than a fully loaded gun pointed at the Irish economy as it spirals downward -in the hope that when the trigger is finally pulled this particular animal will be put out of it’s misery and somehow be restored to life at some point by some voodoo economic means not yet seen or even discovered ?

  • aquifer

    Ruth Dudley Edwards usefully points out that far too many Irish politicians are in the game because their parents were in it before them, and before that were oftwn lawyers, schoolteachers, and trade unionists. Lets hope there is a maths teacher among them.

  • ItwasSammyMcNally

    A betting aside.

    On the night following the Election Paddy Power was still offering odds of 2/5 on their being a FG/Labour goverment – by the next day it was 1/50 – I think Mr Power must have taken one hell of a beating with odds like that.

  • How much higher could corporation tax go without companies leaving? Could they match Luxembourg, or even go a bit higher (as Dublin is a better place to live than Luxembourg)?

  • Greenflag

    aquifer ,

    ‘Ruth Dudley Edwards usefully points out ‘

    Surely you meant ‘uselessly’ ? . Does she recommend that the people elect ‘bankers ‘ or ‘hedge fund ‘ managers or other white collar financial services criminals or does she suppose that the Irish equivalents of Mr Cameron’s much lauded ‘entrepreneurs’ will save the country by creating jobs and sort out the financial mess while doin a ‘nixer ‘ at weekends ?

    BTW aquifer ,

    De Valera was a Maths Professor but somehow could never make the connection with the ‘real ‘economy of his time but he did manage to negotiate his way out of his own execution and kept the young State out of a world war while simultaneously preventing another civil war .

    Neither the ‘white heat ‘ of Harold Wilson’s technological Revolution nor Thatcher’s ‘services’ led economy -nor Blair’s ‘cool Brittania ‘ nor will Cameron’s ‘big Society’ lead our neigbour’s to the New Jerusalem .

    What Britain and Ireland and indeed the USA need is to elect politicians who are dedicated to preventing the erosion and demise of what’s left of our democracies by multinational corporate oligarchies and particularly those in the banking sector. No less a ‘player’ than Mervyn King -Governor of the Bank of England pointed out the ‘defects’ in Project Merlin which was the ‘stitch up’ between the Tory Party and the British Banks . Some have called this stitch up an attack by ‘financial terrorists ‘ . They are probably a lot closer to the truth than many Brits realise.

    http://www.youtube.com/watch?v=KiEQ7ONc55k

    at 7.50 in Stacy Herbert reveals the PMP (Project Merlin Pact.

    Max alas goes overboard with the Godwin Syndrome a little later.

  • test test

  • ItwasSammyMcNally

    Nevin,

    wonder does ‘del’ work in bold as well?