From top Taoiseach and Fine Gael leader Leo Varadkar with Michelle Hennessy (left) and Roseanne RooBeek from Reuters and being interviewed by Axel Threfall on Reuters media about Ireland’s economy and our global presence at Davos, Switzerland.
World Economic Forum, Davos, Switzerland
Mr Varadkar said he hoped that the ultimate [UK/EU] free trade arrangement could resemble “Norway Plus”, but that it would have to be a “specific” agreement.
The kind of Free Trade Agreement (FTA) envisaged has generally been regarded as following a spectrum between the EU-Canada agreement, which reduces tariffs but has little by way of services, and the EU-Norway arrangement, where Norway has virtually full access to the Single Market, but has to abide by all EU rules and pay into the EU budget.
However, speaking on Bloomberg TV during his first full day at the World Economic Forum in the Swiss ski resort, Mr Varadkar said that neither Norway nor Canada were appropriate models.
As global leaders gather in Davos, Switzerland for the World Economic Conference above is a little comparison graphic between Ireland v Switzerland, reading left to right it makes for interesting reading.
Switzerland, the ‘happiest country in the world’ is smaller than Ireland and until 1900 had a smaller population. Today it has nearly 3.5 million more people. It was a poorer country than Ireland in 1871. In per capita terms, Ireland was among the richest in the world in the 1870s and on the eve of the Great War – the Irish economy lost ground after the 1870s to most of the advanced economies outside the United Kingdom, and Switzerland in particular….
“It’s not just the money. It’s not just cold cash. It’s political heat.” – Bono marks 10th ann of @RED #WEF16 #Davos
The charity, officially called Product Red, is a brand that gets licensed to global companies, from Starbucks to Apple. A part of the profits generated by the sale of the products with the brand is donated to a fund that fights diseases such as AIDS and malaria.
“From our point of view, obviously to get foreign direct investment into the country you need particular principles. And in Ireland the corporate tax rate was always 12.5% and is 12.5% and will remain so and that’s across all sectors, and across the entire country. And because of reputational damage being done, we got rid of the so-called Double Irish concept which was an issue of taxation that Joseph [Stiglitz] has often written about and the stateless concept. And now we have a 12.5% corporate tax rate and we’ve introduced the first OECD fully compliant knowledge patent knowledge box set at 6.25% for qualified research and development.
But that’s the taxation end of it and it’s attractive and it’s competitive but it’s not the real reason that people really want to invest in the country. When you talk to them, the real reason is the talent pool, the creativity and the ingenuity and the imagination of young people and it’s the same for every country because you’ve got this capacity.
…For instance, a voluntary movement started in Ireland, called Coderdojo – the writing of code for computers and this has taken off and every weekend you have people who voluntarily teach people how to write code that makes, that makes computers tick, this has gone international…
Meanwhile, following a question from the audience about ‘organised tax evasion’ in Europe and its impact on social inequality, Mr Stiglitz said multinationals have a social responsibility to pay their taxes.
“Apple, in the United States, has become the poster child for using ingenuity to take advantage of these loopholes and we have had a very big effort to try to have a UN movement to address this issue. The view that we had was that the countries from which the tax avoiders were coming, like Apple, should not, those governments should not be deciding how to structure a tax regime because they will structure a tax regime that benefits their companies and not benefits the entire world but the United States unfortunately – supported by several European countries – argued that the tax avoiders and evaders should get together and write the rules so they could continue the tax evasion. So I was very disappointed with my own government on this….
In response, Mr Kenny said:
“Ireland is a case in point where Apple has been mentioned. Apple employ 5,000 people in Ireland. They pay their taxes. But no special deal is done with any company by our revenue commissioners over the years and that’s a case obviously, the European Commission are looking at, not just in the case of Ireland but in other countries as well. But obviously the European Council consider this, the OECD have carried out their BEPS analysis, Base Erosion and Profit Shifting and for one country, we’ve been very much forthright and up for that because clearly, the taxation system, the legal systems are very far behind the digital systems.
So, we don’t do brass plate companies in our country. So you have a plate…Apple employ 5,000 people, who go to work everyday. Obviously if you manufacture something there and you sell it in France or Italy, the intellectual property is invested elsewhere, these are the complexities and the challenges that are there.
I just want to make it clear that, from our point of view, we defend 100 per cent the authenticity of the way we do business with international companies and there was a lot of talk, as you know Joe [Stiglitz] in the United States about Ireland being a tax haven which was completely false, baseless and untrue and has been dealt with very clearly.
And that’s why in budgets we got rid of reputational perceptions with the Double Irish concept …. and I would absolutely above board and out front for everybody so just to make that point.”
[Bono at the World Economic Forum in Davos, Switzerland yesterday]
Bono spoke to Pat Kenny on Newstalk from Davos this morning following a night with the Irish delegation.
Bono: “It’s all sorts and the Taoiseach and Minister Noonan are doing an unbelievable job with the IDA. That’s what I was doing last night. They had a load of people in the room, locked in a room…”
Bono: “…until they agreed to move their companies to Ireland: Jobs, jobs, jobs, jobs was the theme last night. And I must say the two of them made me very proud to be Irish. And Barry O’Leary, the guy from the IDA – he spoke extremely well, very…without notes, just really beautiful about the country and then, you know I was really struck by..these two men spoke very modestly on our behalf. They’re actually very modest men themselves. And that I think struck everyone that was there. I made up for it by the way. But they were very modest. And the coalition – Labour deserves some [inaudible] too, you know. They’ve been through rough, rough times and they’re still there for a lot of people but, you know, you can see some light at the end of the tunnel.”
Pat Kenny: “In Africa, good governance is the holy grail because it is a continent of unbelievable wealth, if only it could be tapped for it’s people, by it’s people.”
Bono: “You are exactly right and, you know, I should say something, I don’t know if people know this but Richard Bruton, Minister Bruton, was really pivotal in getting new legislation in Europe, to make it law, that any mining company, in the extractive industry, registered in the European Stock Exchange, have to publish what they pay for those mining rights. And you think, well, of course, what could be difficult about that? Well you see that is where corruption is, the declared amounts and the real amounts are often different by hundreds of millions. And there’s a transparency revolution breaking across the world right now because of technology, technology is turbo-charging that revolution, people know what’s going on in their government budgets, or want to know.”