As many nations flirt with the possibility of reintroducing national lockdowns, the Sun reports that Ireland has become the first European nation to return to a nationwide shutdown as the number of COVID-19 cases rocket — in a bid to rescue Christmas.

Ireland’s New Lockdown Restrictions

From Thursday all non-essential retail businesses in Ireland will have to close and bars and restaurants will only be allowed to offer takeaway or delivery.

Irish Taoiseach Micheál Martin urged people to support the measures in a last-minute attempt to save Christmas and ensure that retailers could look forward to a ‘bumper’ December.

Other measures being implemented include people having to stay within three miles from home.

Less severe measures include:

• Schools being allowed to remain open, and elite sports like horse racing and Gaelic football will continue.
• The building industry will not be halted by the lockdown and people will be able to meet one other household outdoors.
• Funerals services will be allowed to admit a maximum of 10 people and weddings will continue to admit 25 guests.
• Citizens will be encouraged to work from home unless they are essential workers.

The Irish Government is Pursuing Draconian Measures

The Irish Government’s justification for these measures is based on recent data which confirms that infections are exceeding 260 per 100,000 people over the past two weeks, though that had fallen as low as three per 100,000 in July.

The number of Irish citizens who have died as a result of the coronavirus has reached 1,865 so far. Since the coronavirus crisis began, Ireland’s total confirmed cases have so far reached 50,000.

While any number of deaths are regrettable and tragic, it remains questionable as to why Martin has decided to pursue such draconian measures.

Ireland’s Lockdown Modelling was Wrong

According to the Irish Times, COVID-19 modelling suggested that Ireland would have a 50 percent attack rate and a fatality of 2.5 percent in a worst case influenza scenario. This would have resulted in 78,000 hospitalizations and almost 53,000 deaths. Ireland is currently nowhere near 53,000 deaths and it is worth noting that Irish politicians seem to forget that about the economic impact that lockdowns can have.

At this time of writing, there is no data available to explain how many Irish citizens have died as a result of lockdown itself, but The Daily Telegraph suggests that Britain’s lockdown has killed 21,000 people so far, and maybe as many as 200,000. If future figures reveal that Ireland experienced similar numbers as a result of its first lockdown, imagine how many more could die due to a second one.

The Central Statistics Office discovered that 54.1 percent of Irish businesses surveyed had lower than normal turnover for the four weeks ending July 26th. Many business owners also told Sky News that a second lockdown will result in them having to lay off staff.

Unemployment Will Lead to a Surge in Health Conditions

The Mises Institute referred to a 2014 piece in Harvard Public Health magazine, which found that unemployment can increase the odds of new health conditions such as stroke, hypertension and heart disease by 83 percent. Considering 2,427 and 2,260 Irish citizens died of coronary heart disease and heart attack in 2012, Ireland’s two lockdowns may trigger a spike in people suffering from heart conditions as a result of the unemployment caused by such draconian measures. Those 2012 figures are higher than the number of people who have died of COVID-19 in Ireland so far, yet the Irish Government did not shut down its economy back then.

With the possibility of a no-deal Brexit looming round the corner and living standards damaged by the 2008 recession, which resulted in Sinn Fein’s victory earlier this year, it is unlikely that Ireland’s economy can also cope with a second lockdown alongside these other events.

Taoiseach Martin may be doing what he believes is necessary to stop the spread of a virus, but history may find that lockdowns were far worse than COVID-19 itself in years to come, and that we paid an excessive price to curb a pandemic that is far less deadly than previous ones.

L'articolo Can Ireland Survive a Six Week Lockdown? proviene da InsideOver.

Little can shock observers of European politics these days, but on Saturday in Ireland jaws hit the floor. Sinn Féin—a group once synonymous with sectarian violence—won the popular vote in the Irish general election. It marked a seismic shift in the island nation’s political landscape, tearing apart a century of two-party rule.

What Happened In The Irish Election?

Fine Gael—the party of government led by prime minister Leo Varadkar—suffered a stinging electoral rebuke, taking little over one-fifth of the vote. Fianna Fáil—who have alternated national leadership with Fine Gael for 90 years—fared only marginally better. Sinn Féin, long ostracised by Ireland’s political mainstream, won the trust of almost a quarter of all voters.

The result marked a quantum leap for the left-leaning group, whose popularity has been growing gradually for a decade. Bit by bit, they’ve chipped away at their tainted public image, distancing themselves from the IRA terrorists with whom they were once aligned.Sinn Féin’s centrist opponents have not made it easy, invoking incessantly the party’s ugly past. But with the ebbing threat of militant republicanism—a process commenced by 198’s Good Friday peace deal—the stigma of supporting Sinn Féin has receded. 

Ireland’s Younger Generation Doesn’t Attach Stigma To Sinn Fein

Young people—those who’ve growing up in a relatively peaceful Ireland—are not hampered like their parents by the memory of sectarian murder. Instead, like millennials across Europe, their focus is on living conditions, housing costs, healthcare standards, and faltering public services. Far from dwelling on its founding cause in this election of a united Ireland Sinn Féin instead ran a campaign grounded in the here-and-now.

To youngsters still living with the consequences of Ireland’s financial crash, the party offered a radical left-wing agenda. A freeze in rocketing rental costs, new taxes on the rich and a lowering of the state pension age. Beside the establishment’s unapologetically pro-business approach, Sinn Féin promised something the centrists could not: real change. 

Varadkar’s Perspective

Varadkar might well feel hard done by. The Irish economy is, after all, one of Europe’s fastest-growing, with wages on the up and the unemployment rate low. But his financial stewardship has involved biting austerity measures—rarely popular when it comes to the polls. 

Varadkar was also wrong to consider his handling of Brexit a vote winner. Varadkar was instrumental in brokering last year’s agreement on the UK’s EU departure, shielding Irish business from the likely damage of no-deal, but Brexit fell flat on the doorstep—just 1% of those surveyed in a voter exit poll cited it as an important issue. 

In a curious way, however, it was perhaps the absence of a Brexit-scale constitutional question that allowed Sinn Féin to soar. At the UK general election late last year Jeremy Corbyn—the ardently left-wing Labour leader—was roundly beaten. The reason, most agree, was because his domestic agenda was overshadowed by Brexit shortcomings. 

Sinn Féin’s Savvy Campaign

That’s not to detract from Sinn Féin’s campaign. Recognizing their potential with young voters, the group formulated a savvy social media strategy. On Instagram, their message featured in almost half of all election interactions. On Facebook, that figure leapt to 60%, despite spending up to a third less on adverts than rivals in the weeks prior to polling day.

But still, great uncertainty lies ahead. Chastened by poor local and European election results last year, Sinn Féin fielded just 42 candidates for the 160-seat contest—an effort to minimize losses. Despite their astounding success, this limited slate means the group will struggle to form a workable government. Mary Lou McDonald, the party’s leader, will now have to look to Ireland’s smaller parties—the Greens, Labour, and a host of others—in the hope of cobbling together a left-leaning coalition. 

If MacDonald succeeds at this then she will have locked Fine Gael and Fianna Fáil from power for the first time in decades. If she fails then the status quo will endure, though for how long, only time will tell.

L'articolo Sinn Féin’s Success Shocks The Irish Political Establishment proviene da InsideOver.

After helping Boris Johnson deliver Brexit, Irish Taoiseach Leo Varadkar has suffered a humiliating defeat as the Feb. 8 election in Ireland comes to a close and results are finalized. In addition to Fine Gael emerging a distant third, Varadkar himself suffered a personal embarrassment by becoming the first sitting Taoiseach in Ireland’s history not to lead polls in his own constituency.

Varadkar’s Record

In 2017, Varadkar became Ireland’s youngest Taoiseach at the age of 38. He was seen as part of a new crop of progressive leaders emerging on the world stage.

But despite his key role in the Brexit negotiations, Varadkar failed to address domestic issues such as housing, which turned the middle class against him. As Mark Landler said, many view Varadkar less as a symbol of progress than of privilege.

Sinn Fein Surges To Win Popular Vote

In a surprising turn of events, the left wing Sinn Fein, which has historical links with the Irish Republican Army, made a remarkable last minute surge, emerging on top in the popular vote. With all the first preference votes counted, the party had garnered 24.5 percent, Fianna Fail 22.2 percent and Vardakar’s Fine Gael a mere 20.9 percent.

This means that in terms of the popular vote, Sinn Fein won the elections. However, because Ireland has a system of proportional representation the party won’t have the largest number of seats by virtue of being a small party. Furthermore, since no party is expected to reach the 80-seat threshold, a coalition government is inevitable.

Varadkar’s Next Move

There is already speculation that Varadkar may try to form a coalition government with Fianna Fail. This would not be a surprising move since Varadkar’s last government was put together following a deal with Fianna Fail and Independent TDs. If the two parties decide to form another coalition, it would mean Sinn Fein would get to play the role of the main opposition party.

However, such an arrangement would be suicidal for both Fianna Fail and Fine Gael since it would mean ignoring the voice of the people who had voted overwhelmingly for Sinn Fein. As one commentator said “Brexit has shown us how difficult it is to ignore the voice of the people, and a third of the electorate voted for Sinn Fein.”

Sinn Fein’s Next Steps

Meanwhile, the leader of Sinn Fein, Mary McDonald, has also been trying to reach out to smaller left wing parties in her attempts to form a government without involving the two main parties. Nonetheless, this will be a tall order because it would require the involvement of almost all the elected members.

The other option would be for one of the two main parties to form a coalition government with Sinn Fein. There are no signs that such a coalition would be impossible, especially after Fianna Fail leader Michael Martin refused to rule out a possible deal between the parties.

Sinn Fein Will Have Significant Power Going Forward

Whatever the case, Sinn Fein cannot be ignored in Irish politics anymore. It will either be in government or in opposition. According to the current projections, it will take 37 seats in the 160 seat Irish Parliament.

Following the party’s surprising performance, McDonald declared “this campaign has been about change and giving Sinn Fein a chance to demonstrate what it feels like when it is led by or has a party of the people in it, that has been the theme of our discussions and conversations. This vote is for Sinn Fein to be in government, for Sinn Fein to make a difference, for Sinn Fein to be tested, for Sinn Fein to deliver.”

Irish Election’s Impact On UK Politics

One of the other facts that cannot be overlooked is the effects of this outcome on UK politics as a whole, especially on the question of independence and EU relations. Sinn Fein has always pursued a policy of Northern Ireland being given a special status in the EU, with the whole island of Ireland remaining in the bloc. On its website, it describes itself as an Irish political party dedicated to the reunification of Ireland and an end to the British jurisdiction over the island.

During the Brexit standoff in 2018, McDonald stated that Irish unity was the best way to stop Brexit. The party also heavily criticized Varadkar by arguing that he had made too many concessions to Johnson during the negotiations for Brexit in terms of the “Irish backstop.”

Clues Of Sinn Fein’s Future Political Actions

The nationalists would be likely to champion a referendum that would lead to the unification of the whole island, since Sinn Fein’s election manifesto stated that “We need a national forum, a Citizens’ Assembly to have the discussion and we need to start the planning for the unity referendum.”

In relation to this, it promised to seek the full implementation of the “Good Friday Agreement”, “Publish a White Paper on Irish unity,” “Establish a Joint Committee on Irish unity” and “Secure a referendum, North and South, on Irish unity.”

At the moment, forming a coalition government will be a complex affair which is likely to take weeks, and it is worth noting that if the negotiations fail, then another election will be called.

L'articolo Ireland’s Political Reality Just Shifted Massively proviene da InsideOver.

Irish Taoiseach and Fine Gael leader Leo Varadkar took a gamble by recently calling a general election in Ireland. He hoped that his success in resolving the Irish border crisis during the Brexit negotiations, and a healthy economy that has recovered since the 2008 Recession, would result in his party increasing the number of seats it currently holds in the Dáil Éireann, the Republic of Ireland’s lower chamber.

Sinn Fein’s Surprising Electoral Success

However, Sinn Fein, Ireland’s oldest nationalist party, have stormed to power instead. They have broken the two-party system that has dominated Irish politics since the Irish Free State was founded in 1922, which has seen either Fine Gael or Fianna Fail wrestle for power. The party’s President, Mary Lou McDonald, said the 2020 General Election was ‘something of a revolution in the ballot box.’ 

With all first preferences counted, the nationalists achieved a vote share of 24.5 percent compared to 22.2 percent for Fianna Fail and 20.9 percent for Fine Gael. No party will win enough seats for an outright majority. Sinn Fein will now attempt to form a government, although Varadkar has ruled out a coalition with the nationalists due to differences over tax policies and the group’s Irish Republican Army (IRA) terrorist group links.

‘Significant Incompatibilities’ Exist

Fianna Fail leader Michael Martin did not rule out working with Sinn Fein, but said ‘significant incompatibilities’ still existed. Considering the Irish economy has grown since the 2008 Recession and the Irish Government helped Boris Johnson pave the way for a Brexit deal that has ended fears about a hard border for now, it begs the question as to how Sinn Fein has had its best performance since Ireland left the UK in 1922.

Why Did Sinn Fein Win?

Many voters feel left behind as the Irish economy started to boom again in recent years. The average monthly rent in Ireland is €373 higher than in 2008, a Daft.ie report found last year.

According to Focus Ireland, the number of people losing homes in Ireland has increased by 280 percent since December 2014. More than one in three people in emergency accommodation is a child. However, this number does not include ‘hidden homelessness’, which refers to people who are living in squats or ‘sofa surfing’ with friends. Women and children staying in domestic violence refuges and people sleeping rough are not included in these figures either.

The President of the Irish Hospital Consultants’ Association, Dr Tom Ryan, told the Irish Times that in 2017, there were 589,000 people on hospital waiting lists and that figure had no chance of decreasing.

Sinn Fein Capitalized On Fine Gael’s Failures

Considering Fine Gael has been in power since 2011, Sinn Fein took advantage of the party’s failure to tackle these issues. They promised voters that they would initiate a massive house-building program, institute a rent freeze and provide tax credits to help those with high rents.

Many young people who witnessed how voting can make a difference in elections during the abortion and marriage equality referendums flocked to the nationalists to deliver a bloody nose to the main two main parties.

Denis Staunton of the Irish Times wrote in the Evening Standard that Varadkar’s ability to solve Brexit before the election helped Sinn Fein because it allowed the opposition to concentrate voters’ minds on domestic issues. This meant Britain’s EU exit was not a central focus of this election. Only one percent of people said Brexit was a concern for them before they voted.

This Election Changes Everything For Ireland

Following on from a decade that saw many surprising electoral results, 2020 has already followed that trend in Ireland. Although it could take weeks for a new government to be formed, Sinn Fein are likely to lead some sort of coalition, and that will have wider consequences for the whole of Ireland. It will also impact upon the country’s relations with the UK, the US and EU member states. For the Irish, this election has changed everything.

L'articolo What Brought About Sinn Fein’s Rise To Prominence In Ireland? proviene da InsideOver.

Many countries have set up agencies to attract Foreign Direct Investment (FDI). Have they been successful in their goal? Or are these investment promotion agencies a trap for voters, instead of an effective mechanism?

Notably, agencies attracting FDI have become an almost necessary governmental agency. Out of 36 OECD member states in 2017, 19 (52.8%) had an autonomous public agency for foreign investment promotion. 32 out of 36 had some kind of an investment promotion agency. Additionally, the World Association of Investment Promotion agencies boasts over 100 members.

With competition for trade and investments heating up, these agencies show promise. In 15 years from 2003, the world’s FDI inflows increased by $800B. Part of this increase can be attributed to the agencies working effectively to attract FDI, as shown by research.

Agencies created to increase FDI inflows can prop up local industries and improve their financial status. The most direct impact is, of course, the higher FDI inflows the agencies work to achieve. However, secondary impacts can be just as important.

The transfer of know-how is an important benefit of foreign investments to local economies. Attracting foreign companies, which have the know-how local industries lack, can help to improve the quality of already existing operations or to help launch new industries. The automotive industry in Asia is partly developed because of the know-how transfers from foreign companies.

Foreign investments often are conducted through joint local partnerships. The partnerships with foreign companies can create easier access to funds for the local companies, compared to loans or other types of funding.

Agencies whose purpose is to attract FDI make these goals easier to achieve through targeting relevant foreign businesses and through easing the process of foreign investments.

Governmental corruption can misdirect the goals of FDI agencies. Kickbacks to local government officials for their support to foreign investments are a common problem. Autonomous governmental agencies, with lower oversight from the central government, then become easier targets for corruption.

Lack of differentiation between the valuable and harmful foreign investments is a problem with many FDI agencies. Foreign investments directed solely into low skills jobs, set up a time bomb of potential problems.

A problem occurs when investment promotion agencies only have a goal to increase foreign investments, without differentiating between long- and short-term ones. This can make economies more vulnerable to the flight of services investments. This has been often the case with services centres relocating from high to middle-income countries.

Not all countries have had negative experiences with FDI. Germany and Ireland received the highest net inflows of FDI in the EU in 2018. Have investment promotion agencies contributed to the $169B inflows into the two countries?

Ireland is a great example of how a governmental agency can support economic development. Decades-long work and a flexible approach to investments has contributed to Ireland being one of the top countries in the EU for foreign investments.

IDA (Irish Development Agency), Ireland’s foreign investment promotion agency, has played a critical role in this process. Consistent actions and adaptability to the changing economic environment, are the key reasons for IDA’s success.

However, it is doubtful whether Ireland’s investment promotion agency is the strongest factor in attracting foreign investment.

Low taxes and a good regulatory environment are far stronger incentives than any work that can be conducted by a government-affiliated agency. Moreover, out of Ireland’s over 187 thousand employed by foreign companies, 130,000 (almost 70%) employees are employed by US companies. An 8.5 percentage point difference between the corporate tax rates, and historic ties between the countries, are important pull factors for establishing operations in Ireland.

Going by the internalisation theory, the removal of competition; and the advantages firms posses in some activity, determine a firm’s decision to engage in FDI. Germany, as the top destination for FDI inflows in EU, seems to be a contrarian example. Its highly competitive economy, and a strong presence of local businesses should discourage foreign firms from investments.

High-quality investment promotion work or similar factors then should influence the decision’s of businesses to invest in Germany. However, as historic ties partly explain the large percentage of Ireland’s employees employed by US businesses, part of Germany’s FDI numbers are also explained by social ties. Opposite to Ireland’s experience, migrants to Germany from high-income countries are a positive influence on FDI flows, research finds.

Because of the influence of foreign direct investments in the economic booms of many countries, FDI inflows have been made into a political goal. This has prompted many countries not only to create investment promotion agencies, but also to give autonomy for their choices. There is data that points to the conclusion that promises of foreign investment are a powerful bait for voters. Given that, it becomes clear that higher funding and more autonomy shouldn’t always be given to the agencies.

The establishment of investment promotion agencies does not always contribute to higher foreign investment. The highly variable, and dependent on outside factors, performances of investment promotion agencies show that. As bureaucracy, and along with it, the inefficiency of governmental agencies tends to grow over time, the impact of government investment promotion agencies is bound to worsen over time.

Corruption can also make agencies working to attract foreign investments more of a bait to voters, than an effective force. Any governmental agency can easily become corrupt. Especially, if less oversight is put on it. When autonomous or semi-autonomous investment agencies are a common sighting, doubts arise on whether less control should be given to an area dealing with large financial transfers.

As a direct influence on voters, new agencies to attract FDI are also a powerful political tool. Promises of higher FDI has been found to increase voting preference for politicians, it is not unreasonable to extend the association to agencies working to attract FDI. When their mixed results, and highly variable performance is considered, high accountability is imperative for success.

Focusing on good foreign relations with other countries could be an alternative to the creation of new governmental agencies with just one goal. A favourable political climate is, after all, is one of the factors that influence a business’s decision to invest in a foreign country.

Research shows that good foreign relations do contribute to a better local response to foreign investments, and that good or bad foreign relations influence the choice to which countries foreign investments flow to.

Nevertheless, are good foreign relations all that it takes to build a better economy? The question should be whether good foreign relations create better economies, or do prospering economies contribute to good foreign relations.

If good foreign relations would be a direct way to better economic outcomes, then all it would take for poor nations to develop is to improve their foreign relations. That is not the case since the lack of infrastructure and an underdeveloped labour force are far more powerful blocks to development.

Stable and improving economic indicators of a country should push other countries to seek financial benefits. One way to get to them is through diplomatic means.

Economic growth is a positive influence on FDI flows. The link between higher development and higher FDI inflows exists. Moreover, out of the top 10 FDI host economies in 2018, the developed ones received hundreds of billions of dollars more than the developing ones.

Yet, when country-to-country agreements can take decades to ratify, diplomacy starts to look like an ineffective method for increasing economic growth. After all, even after ratification, it takes a decade to double bilateral trade after an FTA is signed.

FDI itself shouldn’t always be the goal. The development of internal industries and their players could be far more beneficial in the long-term. Yet, if investment promotion is necessary, high accountability should prevent it from turning into political bait for voters.

L'articolo Are Agencies for Attracting FDI a Trap for Voters? proviene da InsideOver.

EIRE’s Taoiseach, Leo Varadkar, told Irish broadcaster RTE that it will be ‘very difficult’ for the UK and the EU to reach a Brexit agreement before the October 31st deadline. This is because ‘big gaps’ remained between the two sides. Although he reassured Boris Johnson during a 45-minute phone call on Tuesday that he would ‘strive until the last moment’ to reach a deal with Britain, he would not do so at Ireland’s, Northern Ireland’s or the EU’s expense. German Chancellor Angela Merkel also informed the Prime Minister that his plans for a deal are ‘overwhelmingly unlikely’ to be approved by the European Council on October 17th.

The Irish backstop has become the stumbling block that is preventing Brussels and London from reaching a post-Brexit deal. Since it was proposed as part of Theresa May’s Withdrawal Agreement (WA), it has been loathed by the Democratic Unionist Party (DUP) and the Conservative Party’s European Research Group (ERG).  May wasted her time trying to persuade Parliament to accept her deal, even though it was rejected three times. She also failed to suggest her own alternative to the backstop. May continually delayed Britain’s date of departure and European leaders made clear that the WA was the only deal that they could accept. After taking no-deal off the table, the EU knew the former Prime Minister was never serious about the following motto: ‘any deal is better than a bad deal.’

Since becoming Prime Minister, Boris has recognised how damaging the backstop is to persuading his Westminster colleagues to approve of the WA. During the Conservative Party Conference, he stated how he would replace it. He proposed to replace the backstop with a protocol on Northern Ireland/Ireland grouped around five central points, one of them being a commitment to not implement a hard border between EIRE and Ulster to preserve the 1998 Good Friday Agreement.

The Irish protocol aims to create an all-island single market with the same rules north and south of the border for farming, food production and manufacturing. This would mean goods produced and animals raised in Northern Ireland would not be subject to compulsory EU checks if exported to EIRE, and vice versa. Furthermore, the all-island single market can only be triggered if Stormont consent to it at the end of the transition period in December 2020. Boris’s deal would also ensure that this country leaves the Customs Union and the Single Market completely. Because this idea earned the DUP’s and ERG’s support, it shows that the Prime Minister broke the Brexit impasse among his colleagues.

Ireland’s refusal to support this protocol is disappointing because a no-deal Brexit will harm their economy. 2 to 2.5 per cent of their GDP could be wiped out in 2030 and it could be 1.5 per cent lower in general by 2021. Businesses are demanding their share of Ireland’s €10.4 billion corporate tax intake reserved for businesses trading in both directions that could be hit by tariffs after Halloween. John McGrane, the Director General of the British Irish Chamber Commerce, proposed that the Irish Government can shore up indigenous companies most at risk from Brexit. But these are unnecessary costs to the Irish taxpayer just because Varadkar refuses to compromise.

The Taoiseach would do well to listen to Bertie Ahern, who is one of his predecessors. The Irish Times reports that Ahern believes Boris’s proposals should be examined carefully before he calls an election claiming that the EU rejected them. He called on Brussels and the Irish Government to clarify their position on the Prime Minister’s protocol. If Dublin and the EU refuse to budge on the Irish backstop, the impact a no-deal Brexit could have on Ireland will be devastating. They will only have themselves to blame if the UK quits the trading bloc without a deal on October 31st.

L'articolo Why Varadkar Should Listen to Boris’s New Brexit Proposals proviene da InsideOver.

As the Conservative Party Conference came to an end, Prime Minister Boris Johnson set out the details of his ‘final’ negotiating offer to Brussels in pursuit of a ‘fair and reasonable’ Brexit compromise. If he can achieve this, he will be able to resolve the stumbling block that caused the Conservative Party’s European Research Group (ERG) and the Democratic Unionist Party (DUP) to abandon Theresa May’s Withdrawal Agreement. He told a DUP fringe meeting at the conference that this will enable the UK to ‘move on’ after October 31st and ensure the public are ‘no longer taken for fools.’ He also said he hopes to agree a deal with the EU over the next few days.

The new plan will aim to avoid creating customs posts on either side of the border between Northern Ireland and the Republic of Ireland. Boris stated that Britain wanted ‘clearance zones’ for goods as part of a package of alternative arrangements. Once the UK leaves the EU, customs checks will be inevitable, but new technology should enable them to be kept to an absolute minimum, as the Prime Minister suggests.

Despite this, Boris faces many hurdles in persuading the EU to accept this new deal. The BBC reports that the mood in Brussels is ‘not optimistic.’ But this has been the main issue throughout the entire Brexit process; Brussels has demonstrated its unwillingness to compromise. By abandoning the threat of no-deal, May had no trump card during the negotiations. This has meant she was forced to surrender on many of the red lines the EU issued from the beginning; protecting EU citizens’ rights, the divorce bill and the Irish border. This was a deliberate attempt by Brussels to force Westminster to accept any deal that they offer them. Though EU leaders have insisted from the beginning that they offered May a free trade deal, if they were serious about their argument, they would have discussed how trade would continue post-Brexit, and then aim to resolve those three issues once it was clear what the UK’s future trading relationship with the EU looked like.

Nonetheless, there is still the possibility the EU could agree a deal at the very last minute at the next European Council meeting on October 17th. Brussels is aware that a no-deal Brexit threatens them more than the UK. With Chancellor Sajid Javid and the Duchy of Lancaster, Michael Gove, assuring Tory delegates that Britain is prepared for leaving the EU without a deal, the Government can ease the damage it could cause by offering VAT and corporate tax cuts and by reaching settlements, like it has with France, that ensures the smooth flow of goods over the English Channel.

This is why it is in Ireland’s best interest to resolve the backstop. It is predicted that 2 to 2.5 per cent of their GDP could be wiped out in 2030. Their GDP could also be 1.5 per cent lower in 2021. With Italy €2 trillion in debt, and a slowdown in the German economy and US tariffs crippling their trade, the EU cannot afford anymore economic disruption. They have three choices on October 17th: accept Boris’s new deal, veto it or agree upon an extension. The Prime Minister has vowed to accept no delay to the Halloween deadline, and if he exploits the loopholes in the Benn Act that The Spectator discussed, he would have to leave with no deal.

The EU is renowned for being notoriously slow at concluding trade agreements. Even if the Council cannot agree on Boris’s deal, the Prime Minister could still persuade them that no-deal would be a short-term solution, and then they can agree upon a trade deal after October 31st. But will the 27 member states agree? The chances of avoiding an extension are slim, but if Brussels has any sense, they would accept the UK’s final offer.

L'articolo Has Boris Found A Brexit Breakthrough With The Irish Backstop? proviene da InsideOver.

A €14bn windfall – something most countries would fight to keep, not hand back. But that’s precisely what Ireland is doing. The money constitutes unpaid tax, the EU ruled in 2016, ordering the alleged culprit – tech giant Apple – to cough up. It was bad news for Ireland’s bid to be big business’s best friend, and now Dublin – alongside Apple – have commenced their appeal. Determined to defend its tax reform rights, the EU is set to fight its corner with vigour. 

The case focuses on two Apple subsidiaries – ‘Sales International’ and ‘Operations Europe’ – and their relationships with the Irish government. A supposed ‘sweetheart deal’ was brokered between the three, the European Commission argues, slashing Apple’s tax burden to as little as 0.005% in 2014. The agreement allowed Apple to attribute nearly all its European profits to an Irish head office that existed only on paper, contends the EU – breaching the bloc’s law.

A Celtic-Californian alliance of lawyers furiously dispute the claims, formally lodging their appeal at the European General Court on September 17. The 2016 decision “defied reality and common sense,” remarked Apple’s counsel, while the Irish argued that Europe had critically misunderstood the country’s tax arrangements. 

Dublin’s desire to overturn the ruling – and return the €14bn to Apple – is twofold. Firstly, the government wants to dispel any notion that the island nation is a tax haven, something the European Parliament claimed in March. Secondly, small in size and lacking an abundance of natural resources, Ireland’s prosperity relies on investment by large multinationals. Openness, predictability, and – most importantly – liberal regulation attracts foreign business – the EU’s decision could threaten that reputation. 

Then there is the issue of judicial independence. “A devastating blow to the sovereignty of EU member states,” is how Apple CEO Tim Cook described the Commission’s ruling. The Irish government agrees – Europe is overreaching in what is effectively a domestic matter. But Brussels isn’t without its own backers. Excoriating Ireland’s conduct on the eve of the appeal, Nobel laureate economist Joseph Stiglitz accused Dublin of conspiring “to get revenue that would have [otherwise] gone to other European countries”.

Such prodigious support will embolden the EU, whose ability to take on big business hangs in the balance. Margarethe Vestager, the bloc’s antitrust enforcer, has a reputation for taking on the mightiest multinationals. Under her direction, European authorities scalped Amazon for $270m in 2017, and have fined Google more than $9bn in recent years. Vestager’s assault on Silicon Valley earned her a typically Trumpian rebuke in June – “she hates the United States,” seethed the president.

The implications of her showdown with Ireland and Apple couldn’t be greater. If the appellants prevail, Europe’s ability to punish states for offering tax breaks to certain industries will be weakened. If they fail, Vestager’s steely approach will be vindicated, and her multinational crusade will continue (the likes of Ikea, Nike, Starbucks, and Fiat Chrysler are all facing EU litigation). It will also be a boon to plans for wider tax reform, which aim to restrict companies’ ability to ‘profit shift’ – the act of booking transnational earnings in a single, more tax-lenient country.         

Back in Ireland, some argue that the appeal should be scrapped and the windfall pocketed. Threatened by Brexit’s unprecedented economic uncertainty – not to mention the mounting risk of a global downturn – the nation could certainly benefit from a €14bn boost. Regardless, there is local optimism that the European court might rule in Ireland’s favour. 

“It would appear that Apple was taxed in Ireland in line with the substance of its Irish operations, before the Commission intervention,” says Peter Vale of Dublin-based law firm Grant Thornton. “From a distance, it seems that the Commission is attempting to rewrite historic tax rules based on today’s laws and mood”.

Either way, with further appeals in the pipeline, a definitive result is years away. It will be a nervy wait for the Irish. Google, Facebook, LinkedIn, Microsoft, and PayPal all have their European headquarters in the country. Apple alone employs 6,000 people in Cork, the island’s second-biggest city. A negative ruling will likely hit investment and job creation in Ireland – and perhaps even Europe as a whole. But the EU is undeterred. Preferential treatment in one state risks the financial fortunes of others, it maintains. Collective, equitable wealth is a cornerstone of the bloc – for that, it’s willing to fight. 

L'articolo Ireland And Apple Team Up Against EU Tax Ruling proviene da InsideOver.

Following his recent visit to Ireland, Boris Johnson told Irish Taoiseach Leo Varadkar that a no-deal Brexit would be a failure that both their respective governments would be responsible for. The Irish backstop remains a sticking point for the British government as they try to use the time remaining before October 31st to avoid leaving the EU without a deal. Dublin is insistent that the backstop must remain part of the Withdrawal Agreement Theresa May negotiated during her premiership, but they have not suggested a suitable alternative to this proposal whilst London has stressed the backstop must be removed.

The EU has said it will consider other solutions to the Irish border problem, but only once the Withdrawal Agreement has been signed off. However, there could be a ‘Norwegian-Swedish solution’ to the Irish backstop that both London and Brussels should consider.

Both May and Johnson stressed that the UK is leaving the EU’s Single Market and Customs Union, and if this happens, it will be impossible for Britain to imitate the Norwegian-Swedish border arrangement as Norway is a member of the European Economic Area (EEA). This means it has to abide by many of the EU’s rules regarding the free movement of people, goods, capital and services, though it can pick and choose which ones it wants to implement. It is also a member of the Schengen zone that disables all passport controls between EU and EEA states. But because Norway is not part of the Customs Union, this means border checks are necessary, which proves neither Ireland nor Britain can hope to retain an ‘invisible border’ post-Brexit.

Despite this, one advantage of being outside the Customs Union for Britain is that it can impose taxes on goods being smuggled into the UK illegally. Politico reported on Swedish smugglers loading their vans with alcohol ready to transport to Norway’s black market. Within the EU, citizens can load up as much alcohol as their vehicles can safely carry and legally drive it over internal borders, as long as they can credibly claim it is for private consumption. But because Norway is outside the Customs Union, it imposes higher tariffs on cigarettes and alcohol. In 2017, Norwegian customs seized 322,000 litres of beer and 47,000 litres of spirits. Post-Brexit, it would be the UK’s discretion which goods receive heavy tariffs (if any) and which don’t.

There have been many arguments for deploying technology to ease British-Irish border tensions. The Svinesund customs office located to the south of Orje, Norway, told Voa News that frictionless borders do work, but they require development and lots of legislation. Much export information is available to Norwegian customs houses digitally, but the problem is they all use different computer systems. Also, export checks are difficult to operate when goods in one vehicle are not uniform. For the UK to mimic such a system, it would take a considerable period of time and it would be costly. A report by Kommerskollegium, the trade board for Sweden, compiled a 2017 report based on a survey of 2,000 Swedish companies that identified customs as the main problem hampering trade with Norway.

Therefore, the Norwegian-Swedish border is one possible model the UK and Ireland could imitate to a certain extent. It demonstrates the advantages leaving the Customs Union has for Britain as they can impose their own customs checks on goods they do not want to enter their borders. Though it could encourage illegal trading in the short-term, the success Norwegian customs officials have had in clamping down on alcohol in 2017 highlights how effective customs checks can be in discouraging this sort of behaviour. It is almost impossible to argue that border checks will not be necessary post-Brexit. It will take time to build the technology necessary to allow for frictionless trade. This is why it is in both Brussels’ and London’s best interests to reach a free trade deal, and fast. As Johnson said, both the British and the Irish governments can avoid a hard border.

L'articolo Is There a Norwegian-Swedish Solution To The Irish Backstop? proviene da InsideOver.

The Guardian reports that Ireland’s Deputy Prime Minister Simon Coveney recently told a Paris conference that the EU has no intention of revising its plans for an Irish backstop. He told his audience, which included Brexit Secretary Stephen Barclay, that the backstop is an agreement with the UK on the basis of a ‘shared understanding’ of the peculiar situation in Ireland. Coveney also blamed Boris Johnson for failing to produce a credible alternative to the backstop and shifted the blame onto the British for escalating this situation.

The reality is that the Irish Government has no intention of assisting the British with forming a post-Brexit free trade deal. Irish Taoiseach Leo Varadkar has opposed Brexit from the beginning. Speaking on Ireland Unfiltered, he told the TV channel that Britain’s EU exit has ‘unleashed the forces of populism and nationalism.’ He has also formed an alliance with House Speaker Nancy Pelosi to ensure the Democrats vote against a US-UK trade deal if Britain leaving the EU means that the Good Friday Agreement is jeopardised. With the reality of no-deal creeping nearer, instead of refusing to cooperate with the UK Government on producing suitable alternatives to the backstop, the Irish must seize the initiative and produce their own imaginative solution to the border issue.

Boris is optimistic that he can still reach a deal with the EU, but he is preparing for no-deal at the same time. The Prime Minister’s decision to prorogue Parliament until 14th October last week proves that he is serious about preventing MPs from thwarting Britain’s EU exit on Halloween. Oxford Economics says the chances of Britain leaving the EU without a deal increased by 30 per cent once Boris prorogued Parliament. Although there are other issues with the Withdrawal Agreement, the backstop remains the main stumbling block to a smooth exit on 31st October. The Times reports that Britain’s International Development Minister Grant Shapps has complained the British Government has produced alternatives to the backstop, but that he is receiving little in return from Brussels. With the October deadline fast approaching and the British Government proving it has never been so serious about no-deal, it is time for Dublin to start compromising, and fast.

Markets Insider suggests Ireland will be one of the worst affected countries by a no-deal Brexit. They predict that 2 to 2.5 per cent of GDP could be wiped out in 2030. For Ireland, the UK accounts for over half of Irish exports and over 40 per cent of imports. 31 per cent of Ireland’s exports consisted of food and drinks in 2018. Cross-border goods trade with Northern Ireland in 2018 was worth around €3.5 billion. Martin Beck, lead economist at Oxford Economics, told Markets Insider that in the event of a no-deal Brexit, Irish GDP would be around 1.5 per cent lower by the end of 2021. This is why Varadkar would be making a terrible mistake if he keeps shunning Britain’s solutions to the border crisis and fails to produce his own.

Furthermore, Irish businesses are requesting their politicians assist them following a no-deal Brexit. They want a slice of Ireland’s unprecedented €10.4 billion corporate tax intake reserved for businesses trading in both directions that could be hit by tariffs after Halloween. John McGrane, the Director General of the British Irish Chamber Commerce, told The Guardian the Irish Government can shore up indigenous companies most at risk from Brexit. Varadkar would be wise to prevent Ireland’s tax intake from being redirected to an outcome he should be aiming to avoid instead of trying to preserve this backstop.

With Irish businesses worried about the impact Brexit will have on their ability to trade and its economic effects becoming more apparent, there is still time for the Irish Government to seize the initiative and suggest their own solution to the border crisis. But it will be the Irish who will suffer the most from no-deal and the ball is in their court to stop it.

L'articolo Ireland Looking For a Quick Alternative to the Backstop proviene da InsideOver.