by Mish
Bloomberg reports Ireland Stuns World With 26% Economic Growth Rate.
Irish gross domestic product rose 26.3 percent in 2015, compared with a previously reported 7.8 percent, the Central Statistics Office said on Tuesday, adding that the revisions are partly linked to firms relocating to Ireland. Tax inversions artificially inflate the size of Ireland’s economy as all global profits may be counted as part of the nation’s gross national income when the headquarters of a group of companies becomes resident. Since 2008, corporate relocations have boosted that gauge by about 7 billion euros ($7.8 billion), according to Finance Ministry estimates.
Irish Success
How did Ireland achieve this success?
The answer is by having a lower corporate tax rate, and a better overall business climate than than most of the EU.
Corporate Tax Rates
The above table created from Trading Economics data.
Ireland vs. EMU (Eurozone) and EU
- Ireland Corporate Tax Rate: 12.5%
- EMU (Economic and Monetary Union) Average Rate: 25.6%
- EU Average Rate: 22.8%.
France Hopping Mad
The rest of the EU is upset at Ireland because of its low corporate tax rate.
And France is particularly upset at at the UK because Chancellor George Osborne just announced a corporate tax cut to 15%, undercutting most of the EU and Eurozone.
Amusingly, France’s finance minister, Michel Sapin, criticised the “manners” of George Osborne.
“I am not persuaded that this is a good thing for the UK,” the French minister said of Britain’s corporate tax plans at a press conference on Monday. “This will not change anything on the passport for instance. In fact, it’s not a good way to start a negotiation.”
Dealing With EU Mules
I billed that tax cut as the Precise Way to Start Negotiations with EU Mules: Get France to Piss and Moan.
My only objection is the UK should have cut rates to 10%, undercutting Ireland.
French Finance Minister Michel Sapin Pisses and Moans
First Step in Training a Mule
There’s an old saying “The first step in training a mule is to hit it as hard as you can in the head with a stick.”
I don’t really advise that with mules, but it is the precise thing to do to EU nannycrats.
The first step in training EU mules is to hit them in the head as hard as you can with a stick. Osborne just smacked French and German mules
— Mike “Mish” Shedlock (@MishGEA) July 11, 2016
As a side note, Osborne will likely be tomorrow along with prime minister David Cameron who announced his resignation effective Wednesday.
Theresa May becomes UK PM on Wednesday. Along with Osborne, she got Brexit negotiations off on the right foot with her message “No Second Referendum, No Back Door Reentry”.
Reflections on Clearness
“It’s clear that the UK can’t participate in the big decisions involving the EU’s future,” said Emmanuel Macron, France’s economy minister.
Well, it’s equally clear the EU cannot participate in big decisions involving the UK’s future.
And with his plan to cut corporate taxes, chancellor Osborne just hit nannycrat mules in Germany, France, and Belgium in the head with not a stick, but a brick.
Expect France to Whine About Ireland
France is already upset at the UK. This Ireland GDP report is sure to have France whining about the “unfair” corporate tax rate of Ireland.
I propose the EU make itself more competitive by cutting taxes instead of pissing and moaning about other countries that have better business climates.
Mike “Mish” Shedlock
