Pearse Trust Blog

When the financial crisis of 2008 began Mexico suffered the steepest recession of any country in the Americas, bar some of the smaller Caribbean countries. Its economy shrank by 6.1% in 2009. Between the third quarter of 2008 and the second quarter of 2009, 700,000 jobs were lost.  In the ten years to 2010, income grew by just 0.6% a year, one of the lowest rates in the world.

On 15 March 2012, the New Zealand Government announced its intention to create a new Ministry of Business, Innovation and Employment to drive economic growth.

Two years ago, the United States and Western Europe were in the same boat: a recession on a scale that had not been seen since the 1930s. With images of the Dust Bowl swirling in the minds of lawmakers, the US, the United Kingdom, and the Eurozone took different tactics to attempt to pull their economies out of the recession. The US adopted Keynesian economic principles; namely, they tried to spend their way out of the recession. The UK and the Eurozone took a different tactic: cut spending. There are merits to each plan, even though they are at the opposite ends of the economic spectrum.

In the year of the Queens Diamond Jubilee, will the London Olympics provide the UK economy with a much needed boost in 2012?

Ireland was the only EU country Mr Xi Jinping - China's leader-in-waiting - visited during his recent tour. During his time in Ireland Vice President Xi Jinping and Ireland’s Taoiseach Enda Kenny witnessed the signing of several 'door-opening' agreements between Government departments, State agencies, universities and companies.

On Wednesday 8 February 2012 Ireland’s Minister for Finance, Michael Noonan T.D., published Finance Bill 2012, to give effect to the tax, and other measures, announced in the Budget of 6 December 2011, and to introduce other tax measures not already outlined on Budget day.  While Finance Bill 2012 runs to 124 sections, this article focuses on the features of the Bill most relevant to Ireland’s economic recovery and of interest in the context of international tax matters. 

One year into its three-year programme, the Troika praised the Irish Government for implementing wide-ranging reforms to restore the health of the financial system and to enhance competitiveness, growth and job creation and agreed to release its next tranche of funding. The Troika have also begun to work with the Irish Government on a technical paper exploring ways to reduce the cost of Ireland’s banking bailout. The Troika concluded that the programme is "on track, but challenges remain and continued steadfast policy implementation will be key." Ireland’s budget consolidation is on a "clear path" to reach the 3% of GDP deficit target by 2015.

Italy’s Prime Minister Silvio Berlusconi has the harshest words for the euro. In 2005, he said the euro has “screwed us all” and blamed it for Italy’s recession.  Now, Europe is on the brink of economic collapse, as evidenced by rising unemployment, a huge Greek national debt that is causing unrest, and other indicators that the euro was not a guarantee of economic prosperity.  Germany’s Prime Minister has a dire prediction for what will happen if the euro fails.  “If the euro fails, Europe fails,” Merkel has said, according to published reports.  She warned of a threat to peace in Europe and emphasised the need to protect Europe.

The Union Bank of Switzerland (UBS) backs up both the views of Berlusconi and Merkel.  In a recent report entitled “Euro Break Up – The Consequences,” UBS states that the euro simply doesn’t work.  It then goes on to suggest widespread civil unrest and possible civil war.

On 3rd October Forbes released its annual Best Countries for Business report and Ireland made the top 10 again, and not just the top 10, it came in 4th - 2 places higher than last year.

Lately, a vocal group of wealthy people have been calling for more taxes on the rich.  From billionaire Warren Buffett in the States to L’Oreal heiress Liliane Bettencourt and other French high-earners asking the wealthy to pay more taxes on their incomes in order to help pull their countries out of debt, it’s inevitable that leaders will listen – and raise taxes.  France announced a 3% tax increase on its top earners, and Italy followed suit.  After plenty of debate, Italians earning over €500,000 annually will pay an extra 3%.  Italy’s move is largely symbolic, however; only 4,437 Italians declared €500,000 or more on their tax returns.  Spain is considering a similar measure, a 2% increase on high earners to raise €1.2 billion.

Unlike Buffett and Bettencourt, however, Italian footballers were not pleased with the Government’s decision to raise taxes.  They threatened to strike, as Italians earning over €150,000 a year were going to be faced with a 10% tax increase.