Economists Constantin Gurdgiev, Brian Lucey, Stephen Kinsella, Ronan Lyons, Karl Deeter, Shane Whelan, David Madden, Brendan McElroy, Valerio Poti and John D Masson suggest a way to provide relief to stressed mortgage holders.
I have been amazed by the media spin put on the European Court of Auditors’ report into the implementation of the EU’s sugar regime reform in 2006. This reform resulted in Greencore deciding to close the only remaining Irish sugar factory in Mallow, thus signalling the end of beet-growing in this country. The reform cut the price of sugar beet by 36% while removing 30% of the EU sugar production quota over a four year period. It is simply not credible to suggest that the Irish industry could have survived in this new environnment.
Patrick Honohan’s latest speech is here.
In addition to explaining the extent of the recapitalisation of the Irish banking system, he also highlights the desirability of transferring risk to foreign investors, either through the sale of banks or the sale of packages of loans (including residential mortgages).
Today’s Eurointelligence bulletin predicts that any EFSF intervention for Ireland will involve an increase in the corporate tax rate. Whether Ireland’s low corporate tax rate is good for wider Europe is certainly open to debate (a good recent paper is “Corporate Tax Harmonisation in the EU” by Bettendorf et al [Economic Policy, July 2010]) .
However, it is worth pointing out that Ireland collects a reasonable amount of revenue from this source (see table below). It is certainly possible that short-term revenues would rise with an increase in the tax rate but it would be a shock to the multinational-dominated export sector. Since this sector is playing a key role in providing momentum to the economy, it is doubtful that this would be put at risk during a crisis situation.
Corp Tax
I’ve just recovered my composure after reading the following article in today’s Irish Times. Its entitled “The top 100 best-paid in education” and is available here.
It should not have surprised me that all 100 are essentially full-time administrators. The salaries of research professors all seem to be subordinate. This contrasts sharply with UK universities (let alone US institutions) where serious salaries are paid to top research talent. Tell me I’m wrong: otherwise I’ll start sending food parcels to my separated brethren in the Republic.