Boris Johnson: ‘From Incredible Hulk to Incredible Sulk’
Business Week: also in the news was corporate tax; the budget; Ryanair; and Stripe
Luxembourg prime minister Xavier Bettel gestures during a news conference after his meeting with Boris Johnson. Photograph: Reuters
You wouldn’t like him when he’s angry. UK prime minister Boris Johnson likened himself and the UK to the Incredible Hulk this week in their collective struggle to escape the manacles of the European Union.
Such simplistic analogies are a calling card of Johnson’s, and, while he may be a little green behind the ears having taken up residency in Downing St just two months ago, his actions in the coming days suggested anything but Marvel Comics superhero.
After talks in Luxembourg with Jean-Claude Juncker that failed to make any ground on the Northern Ireland backstop, Johnson had been scheduled to take part in a joint press conference with the prime minister of the tiny landlocked state in western Europe.
However, with boisterous protestors belting out Ode to Joy – the anthem of Europe – among other anti-Brexit slogans, Johnson abandoned the question and answer session with the press and fled to the British embassy.
His counterpart, Xavier Bettel, gestured to the empty podium by his side as he carried on regardless. “From Incredible Hulk to Incredible Sulk,” tweeted Belgian MEP Guy Verhofstadt.
At least the trip to Luxembourg led to an agreement to accelerate the ongoing talks from twice weekly to daily at a political level, and to bring in Brexit secretary Stephen Barclay for face-to-face discussions with chief negotiator Michel Barnier.
Barclay set temperatures rising in Dublin later in the week when he suggested the UK would not be alone to suffer in the event of a no deal.
“For example, if I take Ireland,” he said. “Two-thirds of Irish medicines come through Great Britain, 40 per cent of its exports go through Dover. Its supermarkets are supplied from distribution centres in the midlands.”
Government sources were said to be taken aback by the tone and content of the remarks, but they were nonetheless dismissed by Taoiseach Leo Varadkar who said there would be no difficulty with supplies of medicines or food.
Meanwhile, there was faint hope of a breakthrough on the backstop when DUP leader Arlene Foster indicated her party could accept special arrangements for the North after Brexit as long as they did not affect its constitutional position in the UK.
Let’s hope it comes to something. Irish International Freight Association this week said traders importing and exporting goods to and from the UK are “still quite far away” from being ready to deal with Brexit.
Elsewhere, a Central Bank study warned up to one-third of Irish farms could be forced out of business in the event of no-deal Brexit, suggesting beef and sheep farms, which represent about 70 per cent of farms, already face “significant viability challenges”.
State’s corporate tax system under fire
Nobel prize-winning economist Joseph Stiglitz didn’t pull any punches this week as he discussed the Republic’s corporate tax system with reporters in Paris.
“Ireland has not behaved well, either globally or for their own citizens, or as an EU citizen,” said the University of Columbia professor. “It is not [being] a good citizen to try to rob your neighbour.
“And what Ireland did is it tried to get revenue that would have gone to other European countries to be relocated into Ireland, to take a pittance out of that [in tax] and to do a deal where Apple is perfectly happy because they get their taxes reduced.”
Stiglitz, who also said we were a “tax haven”, was referring to a 2016 decision by the European Commission that Apple must pay €13 billion in back taxes to Ireland. The State was before an EU court for its appeal on the ruling this week.
A lawyer for the commission told the court the State “blindingly accepted” proposals from Apple when it came to how much of its profits could be taxed by Revenue.
Former attorney general Paul Gallagher, representing the Government, said the commission failed to show Apple had received a selective tax advantage. A ruling is expected as early as the end of this year, but it will be appealed no matter the outcome.
Elsewhere, concerns are growing that Irish food products could be hit by damaging US tariffs, as Washington prepares to impose retaliatory measures on a range of EU goods over a long-running World Trade Organisation dispute over Airbus.
The latest trade figures from the Central Statistics Office this week showed exports jumped more than €2 billion or 18 per cent in July compared with the previous month. The value of Irish goods exports hit a near-record €13.6 billion.
Exports to Britain, which are being closely monitored because of Brexit, fell 6 per cent to €1.1 billion.
All of this will be weighing on the mind of Minister for Finance Paschal Donohoe as he mulls the contents of Budget 2020. There were calls this week from the Irish Tax Institute to bring more people inside the tax loop.
It said it was “unsustainable” to keep more than 750,000 income earners exempt from paying any tax at a time of growing uncertainty with Brexit and a potential global downturn.
Mixed week for Ireland’s richest men
There were contrasting fortunes for some of Ireland’s richest men this week, as Ryanair chief Michael O’Leary signalled more woes for the airline, while the Limerick-born Collison brothers saw the value of their online payments company soar.
Up to 20 Ryanair pilots in Dublin Airport face being laid off as part of wider job losses. Between 500 and 700 pilots and cabin crew at the airline are facing the chop on the back of stalled aircraft deliveries.
Meanwhile, a vote on approving executive pay and bonuses at a Ryanair shareholder meeting passed only narrowly, with 50.5 per cent support.
No such problems for Patrick and John Collison. Stripe is now valued at €35 billion (€31.6 billion) after it raised a further $250 million (€226 million) from investors. That’s up significantly on the $22.5 billion it was worth at the start of the year.