November 22, 2010
So Ireland is taking the bailout money. It may have been inevitable, and if it was, it is better to accept the fact earlier rather than once things have become too late.
But still, this is a heavy cost to all involved.
As Kevin Doran writes here, this offers an excellent opportunity to other EU nations that have not liked the low rates of corporation tax in Ireland. Lets be honest, no organisation likes competition, and this could be the chance of EU Member States to bring the competition more in line with their own rates.
If this offers an opportunity, do you think those other governments will waste it???
I doubt that this will bring Ireland up to the rates of corporation tax in some other countries, but an increase from 12.5%, to say 15% or even 20% would be very welcome in London and Berlin.
So this is politics then. Blackmail. You want our money? You need to take our reforms. Is this a loss of sovereignty? Perhaps to a degree.
But this is the consequence of politicians being unable to manage national finances. As I asked recently, “Should Politicians Be Allowed Access To Monetary Policy?” Their poor judgement and resolve in the good times are now resulting in fiscal, political and societal shifts that they must be considering to be dictatorial.
There is an old saying in finance, “He who has the gold makes the rules”.
In the good times, the politicians make those rules. In the bad times, other politicians and bankers impose themselves.financialguy