Madam, – Nicolas Sarkozy commented on Monday that Ireland must move towards a convergence on tax and that it is “difficult to ask other countries to bail out Ireland when Ireland is determined to keep the lowest tax on profit in Europe”. Given the huge amount of money lent to Irish-domiciled banks by European (and particularly German) banks, surely it is more accurate to say that in agreeing a comprehensive bank guarantee, Ireland is, to a large extent, bailing out Europe? Maybe Mr Sarkozy and Dr Merkel should be grateful that Ireland’s overburdened taxpayers didn’t do “an Iceland” on it, and let the foreign banks suffer for their folly in lending to suspect financial institutions in Ireland.
The current German-Franco position is a cynical and nakedly self-serving attempt to bully a fellow-member state into conceding a key aspect of national sovereignty that no country has yet, and may never, agree to concede.
Well done Messrs Kenny and Noonan in exercising the democratic mandate given to them by the Irish people to stand firm on this issue. – Yours, etc,
Madam, – Angela Merkel and Nicolas Sarkozy want a concession on corporate tax from Ireland in return for a 1 per cent reduction in the penal interest rate. But we have already given so much: the Irish taxpayer has undertaken to repay the money lent recklessly by, among others, German and French banks and institutions. And all this under the watchful eye of the ECB, which, along with the Irish regulators were asleep.
The Irish taxpayer neither borrowed nor benefited from this, but we’re still paying it back. What more do they want?
Is this the same community of nations that I so actively campaigned for in the Lisbon 2 referendum? – Yours, etc,
Madam, – So this is the Franco-German competitiveness pact (EU Summit, March 12th). To make Ireland comparatively less competitive in exchange for a lower interest rate despite all the previous denials that there was no pressure on our corporate tax system. Enda Kenny is to reject this cynical offer. Our 12.5 per cent tax rate is the last vestige of our economic sovereignty and a key element of our prospective export-led recovery. – Yours etc,
Madam, – The dubious principle that a sovereign government and nation are responsible for the losses of their private banks, incurred through reckless lending or otherwise, if accepted, must be applied uniformly and equitably. If the Republic of Ireland is so responsible then the other nations within the EC must be equally so responsible. Thus, for instance the German nation must shoulder the responsibility for the reckless lending of its banks/bondholders even if that lending was ultimately to the Irish property market. The fact is that, within the international banking community, the main culprit, Anglo Irish Bank, was known as the “building society on crack” and further that much of the lending to Irish investors in the property market was destined for foreign (eg German) property. All of this makes the attachment of this debt to the Irish nation even more tenuous.
I use the word “dubious” advisedly since the basis of the free market is the moral hazard of reckless investment. If this is removed by bailing out private banks there is no incentive for them to behave responsibly in the future. On the contrary, since the banks bonus system is, on the face of it, tied to the amount rather than the quality of lending and since no sanction has been applied to many of the senior bankers who oversaw the bad lending, the clear incentive is to continue this behaviour.
Thus, for instance, the bankers continue to pay themselves bonuses in spite of the their current owners’ (ie the Irish people) admonition otherwise.
A radical and principled reassessment of this issue is urgently required since at its simplest it is quite clear that we are unable as a nation to carry the cost of the bailout as currently structured. – Yours, etc,