26/05/2013: Ireland Hard at Work on Troika & Tax Haven Fronts

Several recent points raised in relation to the work being done by Minister Noonan are worth a quick consideration.

Point 1: Ireland, allegedly, is the best-performing 'Troika programme' in the 'periphery' (forget the semiotics of a country being a programme and 1/3 of the EZ being a 'periphery'). We are fulfilling all programme requirements and are even ahead of schedule on some (namely - issuance of bonds we don't have to issue). If so, then can Minister Noonan explain:

• Why have we needed all the material alterations to the programme, obtained in conjunction with 2011-2012 Greek 'rescues' (term extensions and rate reductions on loans), the restructuring of the promo notes, etc. If we are satisfying the programme requirements, then why do we constantly attempt (and succeed) in changing the programme?
• If, as a part of well-functioning programme, Ireland has already recapitalized its banks and if the measures - approved by the EU and the Troika - to rebuild Irish banking sector are working, then why does Minister Noonan constantly 'working' on finding ever more convoluted ways to shove more funds into them? As in using CoCos as here: http://www.irishexaminer.com/business/noonan-examining-ways-to-capitalise-banks-232186.html or tapping ESM as here: http://www.foxbusiness.com/news/2013/05/21/ireland-still-hoping-to-refinance-bank-debts-through-esm/

Point 2: Ireland, allegedly, is not reliant in its adjustment on beggaring its neighbours via asymmetric tax regime, when it comes to corporate tax rates. Per Minister Noonan (see: http://www.irishtimes.com/news/politics/oireachtas/us-senate-committee-quoted-incorrect-tax-rates-for-apple-activities-here-d%C3%A1il-told-1.1404834): "The ability of multinational companies to lower their global taxes using international structures reflected the global context in which all countries operated." 

But then, "Mr Noonan said ... “some multinational corporations, with the assistance of legal practitioners and tax advisors, have exploited the differences in these systems to their own advantage”." So, wait a second here: it is down to 'some' MNCs - with help of legal & tax advisors - to 'exploit' tax system to their advantage. "The Minister said tax management was an international business. “Very clever accountants and very clever lawyers are involved in it and they basically try to get into an unspecified space between the tax laws of two jurisdictions." 

Ok, we get the point - bad advisors and bad companies are exploiting good Irish regime or global regime. Were it not for this 'exploitation, one can assume things would have been different, right? Wrong: “Operating in that space, they find ways of avoiding the tax that otherwise would not have been payable.”

Come again? Apparently, some multinationals just love hiring expensive advisors to avoid tax that would not have been payable even absent these advisors. You see, per Minister Noonan, Ireland's reputational problems of being branded a tax haven stem from utter stupidity of some MNCs that are so dim, they hire useless but very clever advisors to devise complicated and clever schemes to avoid that which doesn't exist. 

Seems like Minister Noonan has been exposed to too much logic lessons as of late.