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There has scarcely been a more dramatic week in Anglo-Irish relations for many years, but an agreement was finally reached between London and the EU on the Border with Northern Ireland which, crucially, met with Dublin’s approval.
Indeed, the week was bookended with a botched deal on Monday that was sunk by Arlene Foster and the DUP, before days of to-ing and fro-ing led to what was ultimately a bit of a fudge on Friday.
In between there were public exchanges between Taoiseach Leo Varadkar and British prime minister Theresa May that would have been unheard of in Enda Kenny’s day.
The Government made clear its “surprise and disappointment” at what was effectively an about-turn by the British on a deal “that was done”, according to Minister for Foreign Affairs Simon Coveney.
The row centred on the wording of the agreement. First we heard there would be no “regulatory divergence” between the North and the South. This was then changed to a commitment to bring about “regulatory alignment” on both sides of the Border.
Foster and the DUP – inferring that this would mean different treatment for the North from the rest of the UK – were seething. Fearing a republican plot to advance the cause of a united Ireland, the party torpedoed the agreement by threatening to pull down May’s government.
Everyone got over it, though, and after a few days of knuckling down to more talks Varadkar was in a position to hail “a “significant day” for Ireland after reaching a “politically bullet proof” agreement to avoid a hard border. However, the deal agreed leaves open how this will be achieved.
The deal also makes clear the whole of the UK, including Northern Ireland, will be leaving the customs union. In the absence of a trade agreement, the UK will ensure “full alignment” with the rules of the customs union and single market. However, there will be no new regulatory barriers allowed between Northern Ireland and the rest of the UK without the permission of Stormont, at the behest of the DUP.
The deal has been sent to the leaders of the EU 27 states ahead of a summit next week with a recommendation it be accepted. If agreed, divorce talks can move to phase two, which will deal with trade and the future relationship between the UK and the bloc.
Business leaders across Ireland and the UK welcomed the news, while sterling hit a six-month high against the euro when the news broke.
While Europe and the Republic have put forward a united front on Brexit that has been anything but the case on corporate tax, as yet more criticism of the State’s practices came to the fore.
A new report found we are among the most active states in facilitating corporations moving profits to low – or zero – tax destinations. Even more damning, the State is also responsible for imposing the largest losses in corporation tax on developing countries.
That’s according to Tax Games: the Race to the Bottom – Europe’s Role in Supporting an Unjust Global Tax System 2017, which was compiled by a group of 46 non-governmental organisations across 19 European countries.
Using a traffic-light system to rate member states, the Republic was one of just two to show as red in all five categories: transparency on beneficial ownership; support for country-by-country reporting; tax treaties; harmful tax practices; and global solutions. The Netherlands was the other.
The leader of Germany’s Social Democrats also took aim at the Republic and criticised US technology firms Apple, Facebook and Google, saying a strong Europe was needed to make sure they stick to the rules.
Martin Schulz, who hopes to persuade his party to approve talks with German chancellor Angela Merkel on forming a new coalition, said Ireland was complicit in allowing companies such as Apple to avoid billions of euro in tax.
In a bid to crack down on international tax havens, EU finance ministers in Brussels endorsed a blacklist of 17 “non-co-operative jurisdictions”. The EU believes these territories are colluding in tax avoidance. Another 47 states which pledged to introduce transparency measures were listed in a “grey” list.
Indeed, the latest exchequer figures showed a surge in corporation tax receipts in November have put the Government on course to exceed its budgetary targets for the year. They were 5.5 per cent ahead of the department’s forecast.
Separately, the Nevin Economic Research Institute warned that tax planning by multinationals is distorting the economy and limiting the usefulness of traditional indicators such as gross domestic product (GDP).
The trade union-backed think tank said certain sectors, most notably information and communications, were growing “very quickly in real terms”, thereby inflating the true level of economic activity, which is partially down to multinational tax planning.
Meanwhile, Minister for Finance Paschal Donohoe said he expects Apple to start paying up to €13 billion in back taxes into an escrow account once it is set up at the end of January, but an exact date has yet to be agreed.
A proposal by the owner of the Cuisine de France bakery business to pay executives bonuses of 50 per cent might be described as half baked after it prompted a shareholder revolt this week at its annual general meeting.
Embattled Irish-Swiss company Aryzta offered the bonuses to executives for staying with the business following a slew of senior management departures earlier this year. Almost half of shareholders voted against the deal.
The day before the company announced plans to sell its La Rousse brand to the Musgrave Group for a sum thought to be in the region of €30 million. It looks set to raise up to €84 million between that and a once-off dividend payment from French frozen food firm Picard, in which it holds a 49 per cent stake.
In other company news, recruitment group Indeed is to become the second major occupier of the Capital Dock campus development in Dublin’s Docklands after it leased more office space there.
In media, the Irish Times agreed a deal to acquire all the publishing and media interests of Landmark Media Group, the Cork-based company that owns the Irish Examiner newspaper and other media assets. Financial details of the transaction have not been disclosed but AIB has taken what is described as a “significant debt restructuring” as part of the process.
Elsewhere, plastics manufacturer One51 is preparing to float after shareholders paved the way for a possible stock market launch.
In aviation, Aer Lingus is flying high after analysts with British bank Barclays estimated it to be worth €2.2 billion at the end of 2016, which is almost 50 per cent more than the sum paid for the Irish carrier by International Airlines’ Group 16 months earlier.
It’s not all good news, though, as a report by consultants Lane Clark & Peacock found the financial hole in the pension funds of Ireland’s largest companies jumped almost 40 per cent last year.