The currency is still under water(they did suggest lowering of rates) but the equity market(FTSE) has more than recovered.
So, what is the "market"'s takeaway on Brexit a couple weeks later?
FWIW the EU has been pretty unified in saying that they would not even negotiate with the UK until Article 50 is invoked. Whether that is irrevocable under the Lisbon treaty, or what it would take to undo that invocation once made, I don't know.
Given (as I understand) that the parties have only two years to work out a withdrawal once the article is invoked, constitutional litigation would be problematic. ("Constitutional" used in the loose sense, obviously, as opposed to a Roberts Rules of Order-type parliamentary dispute).
The currency is still under water(they did suggest lowering of rates) but the equity market(FTSE) has more than recovered.
So, what is the "market"'s takeaway on Brexit a couple weeks later?
Panic is over. But until the trade deal comes into focus, I think there will be a fair amount of uncertainty and hesitancy to invest heavily in the UK. Just guesses though. I would want to know what the deal is before committing significant capital in London; I may need that for Frankfort or Dublin instead.
Excellent article about Cameron's final PMQ time -- cannot wait to watch it later when I get home:
http://www.mirror.co.uk/news/uk-news...vation-8411818
May names the beginning of her cabinet. Boris Johnson as Foreign Secretary?!?
http://www.huffingtonpost.co.uk/entr...b33?edition=uk
David Davis as "Brexit Secretary" -- don't know anything about him.
For those interested, the first lawsuit to determine whether the PM or the Parliament as a whole has the power to invoke Article 50 has been filed. The judge said it was likely to be expedited to their Supreme Court before the end of the year. PM May (whose first PMQ should have been this morning I assume) said she will not invoke before end of year anyway.
In challenge to Jeremy Courbyn on the Labour Party front, Angela Eagle is backing out leaving only one challenger to Courbyn. They decided that they did not want to split the vote against Courbyn. A lesson the #NeverTrump folks could have benefited from this year.
So, with today's ruling against Apple, what implication does it have for Ireland? My 10 second takeaway is that the EU is using state aid doctrine to dictate tax policy. Does the EU explicitly cover member state's tax policy? Given that favorable tax policy was the cornerstone of Ireland's attractiveness to foreign investment(I'm guessing), does Brexit seem as irrational now as it did immediately following the vote?
I'm pretty sure that each country sets its own tax rates, and the UK certainly does. I think the major tax implication has to do with barriers into the common market, and the lack of tax barriers within the common market, for the sale of goods and the provision of services. I will defer to those who have a better understanding though.
Maybe Ireland will follow the U.K. But seriously, this case will remain in the courts for many years, so it's unclear what the lasting impact may be. But here we have another example of an unelected EU bureaucrat trying to exert EU authority over national sovereignty which is the fundamental flaw in the evolution of the European experiment.
I'm not familiar with Ireland today and the Apple case specifically, but it appears Ireland may have been foolish if what the EU said about form over a lack of substance is true. In Switzerland, for example, you have move/hire people and create/prove true substance and economic risk around a "hub co" in order capture European profits at a low statutory tax rate. It seems Ireland is skimming some taxes from the Apple structure but no significant job creation and economic activity is benefiting the country.
This is a good article describing the situation. Interestingly, the issue of substance is at odds.
So, in fact, it seems Apple did create lots of substance and jobs in Ireland to the satisfaction of the Irish government and the EU Commission but not Margrethe Vestager. This is another example of why the many Europeans who embrace the concept of a united Europe, hate the EU in Brussels. My money is on Apple eventually prevailing."Back in 1991, Apple struck a tax deal with Ireland that was completely aboveboard and legal. The Irish government provided Apple with a "comfort letter" that said the company would pay very low rates of tax if it based its European operations in Ireland."
"In the 15 years since, Apple has created thousands of jobs in Ireland. By 2015 it had 5,000 employees in the country. Another 1,000 jobs are planned for the headquarters in the Irish city of Cork. This year Apple will open its site near the town of Athenry, with another 200 jobs in the making. Apple has noted that its tax arrangements were agreed to repeatedly by Ireland's government. The European Commission itself says the agreements were legal, albeit mistaken."
"But Margrethe Vestager, the European Commission's competition commissioner, made Apple's Irish tax arrangements sound like a scam:
Apple created a head office that did not exist: "This 'head office' had no operating capacity to handle and manage the distribution business, or any other substantive business for that matter ... The 'head office' did not have any employees or own premises."
http://www.businessinsider.com/apple...reation-2016-8
77Devil, I believe it is economic, not bureaucratic. The European Union is out to screw the leading American technology companies, Apple, Google, and Microsoft. They are egged on by European companies working both through their own governmental reps to the EU and directly with the EU agencies. The leading suspects are Alcatel, Siemans, Bouygues, and even companies like Deutsche Telekom. Hmmm... France and Germany. The other form of harassment is in charges of monopolistic behavior. Apple isn't particularly vulnerable to this, but Google and Microsoft are.
Why then, is Ireland so upset? Ireland's technology companies are all from international (usually American) companies that establish operations there. Therefore, the American international companies are friends, not competitors.
Sage Grouse
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'When I got on the bus for my first road game at Duke, I saw that every player was carrying textbooks or laptops. I coached in the SEC for 25 years, and I had never seen that before, not even once.' - David Cutcliffe to Duke alumni in Washington, DC, June 2013
EU, G20, etc. all hate "tax arbitrage." Have been trying to harmonize tax regimes for years with little success (sovereignty arguments and self interest).
We see the same thing here in the USA - how many companies relocate due to favorable offers from another state?
Capital and businesses have feet - and will move to the most advantageous environments.
Of course it's economics. These structures has been in place for decades(one of my former employers setup its first in the late 80's-not in Ireland-even before Apple). The technology companies are just the tip of the iceberg(in numbers if not in size), but their names are high profile and the bounty is large so the bureaucrats in Brussels have decided to try to exert a new authority over the national sovereignty of member states. But Ireland is a piker compared to Switzerland, which is out of the grasp of the greedy EU bureaucrats. Plenty of European multinationals have set up the same/similar structures on the continent in tax friendly jurisdictions. So the hypocrisy should not be lost.
Do you still insist Brexit won't happen?
Let me express my concerns and desire about Britain and the Europe Union in general. There are only two, and I give them weights:
#1. (98 percent) The European Union grew out of the conviction of French and German citizens and officials, joined by those from the Benelux countries, to use economic integration and (later) political integration to ensure that the horrors of World War I and World War II will never be repeated on the continent of Europe. Therefore, I want the EU to continue to exist in a robust form. "Nationalist movements" have the threat of fracturing the EU, which could POSSIBLY lead to dissolution. In point of fact,* economies and populations are highly inter-related on the continent and such dissolution seems very unlikely.
#2. (two percent) I really like it that English is the global language -- particularly in business -- and this is very good for America. (And I really try hard to stumble along in a couple of other languages when I travel.) English is the official language of the European Union (or, as some say, "bad English" or "airport English" is the official language of the E.U.) Britain is the ONLY country in the E.U. that lists English as its official language. Ireland -- and this seems like a joke -- specifies "Gaelic" or "Irish." Will English continue as the official language of the E.U. when the U.K. is no longer a member? Although the E.U. governmental staff function pretty well and have learned English, one would expect the pressures to mount to move to a language spoken on the continent (probably French). This is not good for America.
The continuance of the E.U. is a matter of war and peace.
Kindly,
Sage
* What the hell does this mean?
Sage Grouse
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'When I got on the bus for my first road game at Duke, I saw that every player was carrying textbooks or laptops. I coached in the SEC for 25 years, and I had never seen that before, not even once.' - David Cutcliffe to Duke alumni in Washington, DC, June 2013
Nationalists movements have not occurred in a vacuum. I seem to remember something about that in the birth of our country. While we agree on the importance of economic unity as an historical foundation for peace in Europe, it was largely satisfied for decades by the framework of the original common market. What EU governance has evolved into, however, has skewed the balance of power between Brussels and the national capitals, and is counterproductive and completely unnecessary to maintain the peace. And the countries really don't have the capability to make traditional war on each other. On the latter points, I suspect we will never agree.
The Brits were very smart to reject the Euro, a truly flawed concept. We'll have to see re: Brexit. But if the British exit were to force a roll back in EU overreach, Brexit could be the catalyst for saving the EU.
Oh, I must add that if the EU commission decides to drop English in a pique, it will make itself less relevant than it already is.
Last edited by 77devil; 08-30-2016 at 01:51 PM.
I used to work for a company with offices in France and Germany. Their lingua franca was English, even well before the EU. So long as the US and UK remain relevant in Europe, I suspect it'll remain so.
-jk