Categories Uncategorized Inversion: UK versus Ireland Post author By Philip Lane Post date July 29, 2014 18 Comments on Inversion: UK versus Ireland This WSJ article explains why UK can be more attractive than Ireland as an inversion location. Related ← Record-Low Bond Yields → Inequality in the Irish Context 18 replies on “Inversion: UK versus Ireland” fyiThe Increasing Irrelevance Of Corporate Nationality 29/07/2014 by Robert Reich “You shouldn’t get to call yourself an American company only when you want a handout from the American taxpayers,” President Obama said Thursday. He was referring to American corporations now busily acquiring foreign companies in order to become non-American, thereby reducing their U.S. tax bill. But the President might as well have been talking about all large American multinationals. Only about a fifth of IBM’s worldwide employees are American, for example, and only 40 percent of GE’s. Most of Caterpillar’s recent hires and investments have been made outside the US. In fact, since 2000, almost every big American multinational corporation has created more jobs outside the United States than inside. If you add in their foreign sub-contractors, the foreign total is even higher. At the same time, though, many foreign-based companies have been creating jobs in the United States. They now employ around 6 million Americans, and account for almost 20 percent of U.S. exports. Even a household brand like Anheuser-Busch, the nation’s best-selling beer maker, employing thousands of Americans, is foreign (part of Belgian-based beer giant InBev). Meanwhile, foreign investors are buying an increasing number of shares in American corporations, and American investors are buying up foreign stocks. Who’s us? Who’s them? Increasingly, corporate nationality is whatever a corporation decides it is. So instead of worrying about who’s American and who’s not, here’s a better idea: Create incentives for any global company to do what we’d like it to do in the United States. Read on: http://www.social-europe.eu/2014/07/corporate-nationality/ Who’s us? Who’s them? Labour. Capital. Did I miss something or … ? The basic solution would be of course that the US lower their insane corp tax from 40% to the more usual 30%. But sure you can’t have that, the US adjusting to the rest of the world. Next step to european hell would be adopting the metric system : – ) What most people do not want to see is the civilizationary benefit of multinationals, like Volkswagen. Worker councils, apprenticeships, in the deep black south of the US : – ) Coming back to thread topic, for a change … : – ) I wonder how comfortable US executives will find life in London, when UKIP forces an exit from the EU, and a subsequent 25% additional drop of real wages, beyond what JohnTheOptimist already described. The recent Junker 26/2/0 vote made it pretty clear that mainland Europe will give no quarters to London bankers The general point that can be made is that inversion is a US problem and one only the US can resolve. @ francis The thread on historically low bond yields underlines the fact that what Cameron is up to – winning the net election – is not that relevant in the broader context. For a bit of real news, this item is the real thing. http://uk.reuters.com/article/2014/07/27/uk-ecb-germany-wages-idUKKBN0FW0FE20140727 Well, first I have to say that tariff struggles are none of the business of central bankers, and of course not foreign ones. Second, they are of course right : – ) , but also a little late, because all relevant talks are finished for the year. The latest were the metal worker union, 09 of July, erm, carefully lined up with federal and chemicals, because they took the highest raise 01.07.2013 +3.4% 01.05.2014 +2.2% 01.07.2014 +2.3% 01.05.2014 +1.7% a 9.9% raise (multiply !) over 2 years, not to bad. This is the proper way to get to the common inflation target. 10 years ago, I left a major portion of my money in the US, although that was a little disadvantage with the capital gains tax, but the reasoning was “whatever happens in Europe, the US are safe and sane”. With recent events I am actually thinking about getting the most out of there. And my impressions is, that more thinking people in the US are also fed up with all the insanity of debt caps, disfunctional health care, now just in a different form, and extreme partisan bickering, and the increasing aggressivity and belligerence. And then moving to a place like London or Dublin especially with headquarters looks attractive. And talking seriously, the UK would be extremelyx stupid to leave the EU. @ francis As to the UK, its experience of EU membership is not that of Germany as this Bertelsmann study reveals. However, I would agree that leaving the EU is neither a solution nor likely. http://www.bertelsmann-stiftung.de/cps/rde/xchg/SID-19C79010-61492E5F/bst_engl/hs.xsl/nachrichten_121808.htm @ DOCM I think for most of us the EU and the Euro are now a marriage of convenience (“Vernunftehe”) and not a love affair. The AfD (With the signer of Kevins manifesto, Henkel : – ) got 7% at the EU elections, 10% in Sachsen. only at first glance off topic, one very interesting link, look at the youtube before it gets deleted (can somebody save such things?, I would be very interested and willing to pay !): http://www.spiegel.de/kultur/tv/die-anstalt-im-zdf-zeit-journalisten-einstweilige-verfuegung-a-983517.html the second shows Germany more fed up with the endless anti-Putin hatemongering http://www.spiegel.de/spam/satire-spiegel-online-putin-spiegel-a-983381.html and look at the votes ! @ All FYI http://www.enterprise.gov.ie/en/News/Next-phase-of-FDI-policy-must-be-based-on-talent-technology-sectors-and-great-places-to-live-%E2%80%93-Minister-Bruton.html @ francis The – not so tenuous – linkages to the topic of this thread of what is happening in a wider context lies in the nature of the activities of the large corporations of which Germany has its share. As to your links, what can one say? The second one refers to 107% of Germans? Such surveys have no scientific basis whatsoever. The government in Kiev is not made up of angels. It is a question of with whom does one side; the countries following some semblance of the rule of law and respect for international norms or an autocratic leader in clear breach of both? The net impact of the further sanctions now agreed will be to add to deflationary pressures in the EA; the only prediction that one can make with some chance of being correct. @ francis FYI the revisionist views of Weidmann on wage increases. http://www.faz.net/aktuell/wirtschaft/wirtschaftspolitik/bundesbank-praesident-weidmann-fuer-3-prozent-lohnanstieg-13070729.html The biggest policy shifts in Germany are invariably the ones that draw the least attention internationally! The UK is the number 1 destination in Europe for foreign direct investment projects followed by Germany. London is also the top city for inward investment. In today’s aspirational report on FDI into Ireland, even the claim: “Ireland continues to punch above its weight” is supported by out-of-date data. It’s revealing that a minister could approve a report on such an important topic without any serious analyses on real world challenges. This is one of the goals: “Ireland recognised as one of the most enterprise aligned science, technology & innovation systems in the world, renowned for excellence in research, connecting and collaborating with enterprise, delivering sustainable economic impact, and attracting investment and exceptional talent.” Within 5 years? Why would the poor patenting record have any relevance to this dreaming? Irish Economy: Bruton publishes new FDI policy; Avoids inconvenient facts DOCM, the second link was SATIRE, as all in the spiegel/spam directory. Therefore the 107 % : – ) If this happens even with you, it just shows how really bad humour travels on the internet. To the wage increases, if you look on my time table above, it is pretty clear that the metal workers did and do not need no f..king advice from some central bankers, to not only demand but to get wage increases of 6% last year. But they covered that neatly, didn’t they. So now even Jens is “doing an American” and trying to give the impression to spearhead a movement he as opposing until recently, just like habitual liar John Kerry now suddenly wants the US to head the climate movements after blocking the Kyoto Protocol since 1992. With all due respect to the Bundesbank, it is not up to them to draw up 3% rules for tariffs. Probably social democrat Jörg (Asmussen) has to teach Dr. Jens some manners : – ) @ francis I missed that! You are still IMHO avoiding the central point which is the change in position of the Bundesbank which must reflect some really serious concerns with regard to the domestic economic numbers and prognoses! That it would intervene in the supposedly – even constitutionally – sacrosanct relationship between German employers and employees is but further evidence of this. @ All Off topic (but beyond belief!). http://www.theguardian.com/politics/2014/jul/30/david-cameron-pr-stunt-suspected-illegal-migrants @ DOCM I think the appropriate response is, what an absolute Muppet. The UK, bereft of leadership seems destined to remain in positive feedback loop of opinion poll politics, and bottom of the barrel blame the outsider journalism. Conveniently keeping the spotlight away from the an economy that has been fundamentally changed to hose the little guy and reward the add no value, skim of the top, socially irresponsible thieving shisters in ‘the City’. DOCM, I think the Buba position is entirely logical in the respective circumstances. For the most times the current account balance of Germany was practically neutral and our wages amongst the highest in Europe. Friendly reminders for temperation made sense. This massive increase in our Current account surplus only happened after 2005, Agenda 2010 turned out to be more efficient than planned. Then came 2008 crash, 2009 what is going on, 2010 looked like relieve, and to realize that this surplus becomes persistent, and that our wage moderation went a little too far, especially compared to some more wild peripheries, that settled in only in 2011/2012. And then the unions went for the raises significantly above the inflation. That Jens comes after the tariff treaties are ratified, and gives a friendly reminder, boys, in the long run only inflation plus productivity is OK, I don’t see any fundamental “change” in this. The situation has changed, and so the response. Cameron trotting out cheap populism for even nominally just 100 Mio a year, AND antagonising former allies like Sikorsky from Poland, their “home front” must be really desperate. Makes we wonder how that vibes with non WASP execs at the MNCs they want to attract. @ francis So do I! It is just a pity that it took so long for BUBA to arrive at it. This might have something to do with it. http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-31072014-AP/EN/2-31072014-AP-EN.PDF The FT had a very interesting contribution on the topic of bubbles and the manner in which they are inflated by inaction, or the wrong action, because of excessive fear of the risks of inflation; when the real risk is in the other direction. http://www.ft.com/intl/cms/s/0/06a6194c-1683-11e4-8210-00144feabdc0.html#axzz38z3zSwTX BUBA when it it was free of the euro was consistently ahead of the curve. Since the latter’s introduction, the opposite appears to be the case. By the way, the latest reference by a group of professors to the German Constitutional Court relating to the euro seems to have raised no more than one big yawn. Which is probably what it deserves. I find the timing of the Buba as a post execution clap-trap in this matter entirely appropriate : – ) So far I see no bubbles in Germany, some hot spots in real estate in Munich and a few other places, but not in 95 % of Germany, and the logical consequence of the extremely low rates. What does concern me more is the next bubble in the US. In World War I, mainly Austria and Italy fought a protacted mountain war, with miners and sappeurs building tunnels underneath each others montain top fortifications in the Alps, often only a tne meter away of each other. And often they could not see it, nor hear it, but feel it, that something was going on, and counter digging. When I look at http://www.federalreserve.gov/releases/z1/Current/z1r-5.pdf Table R.100, now lines 22 and 23 wealth W and income I of private households, I get now an even higher W / I ratio then at the height of the bubbles in 2000 and 2007. No such thing in Germany. Something is going on, I feel it, The American Hamas, a.k.a. Federal Reserve is up to something. Do they want to solve this with a little war , or …. ? Let the professors get this clarified, …. maybe in 2020 ? Apparently the UK is only interested in Oligarchs, who can put up 1 Mio pounds upfront, and screw the polish plumbers. How this relocation potpourri plays nowadays: http://www.bloomberg.com/news/2014-07-31/fiat-says-ciao-to-italy-as-merger-with-chrysler-ends-era-cars.html “Created by Italian-Canadian Chief Executive Officer Sergio Marchionne, Fiat Chrysler Automobiles NV will be incorporated under Dutch law, based in the U.K. and listed on the New York Stock Exchange.” DOCM, when did this “Jens Ulbrich” first speak out for higher wages? Because so far the timeline is, as I see it, and wait to be corrected : – ) May 2013 metal worker tariff partners decide on 6% higher wage May 2014 metal worker employer and employees decide another 4% raise June 2014 some Buba guy expresses support to the obvious July 2014 2 central bank jens and peter try to paint the decision as their idea and want to formulate some silly rules Comments are closed.