Icy exchanges as taxing matters dominate

The sign by the main road into the Lough Erne resort said it all: "Obama in Fermanagh, we're putting the spuds on." For his Russian counterpart, the message was the same except that they were "Putin on the potatoes".

Welcome to the Group of Eight summit, a long-awaited occasion for wry Northern quips amid hyper-security as world leaders made their unlikely way to the lakes around Enniskillen. This is the season for no-nonsense marksmen, copious razor wire and mainly affable world leaders in open-necked shirts addressing each other on first-name terms.

The serious business started in earnest last evening as the leaders sat down for a discussion on the global economy. This will be followed this morning by talks on tax, with new efforts to clamp down on aggressive avoidance by big business high on the agenda.

This is something which could yet cause problems for Ireland, given persistent political attacks in the US against the tax strategies deployed in Ireland by Apple Computer and other big multinationals.

Although Taoiseach Enda Kenny insists Ireland has nothing to fear, the reputational damage from the Apple revelations is quietly acknowledged in Dublin. As world leaders seek to boost their battered finances by collecting more tax from increasingly profitable big business, small tax payments from certain major multinationals expose Ireland to assault.

It is as well to note that EU Commission chief José Manuel Barroso made it clear to reporters here that Europe is moving in the direction of companies being compelled to declare profit, revenue and tax country-by-country.

Mood music
Questions remain, however, as to whether leaders at the global level are willing to take that path. The mood music suggests they won't, although parallel moves are under way to force the companies in sheltered offshore locations to declare their ownership to the tax authorities and police.

We will know today how far this goes and whether, as seems unlikely, the information on the control of the secretive companies in question is made public. Still, the drift in international debate is clear.

Kenny himself took part in talks between the Europeans in the G8 and Obama on the nascent drive for an EU-US trade deal. The Taoiseach was in the front row of the audience, alongside his Italian counterpart Enrico Letta, when Obama, Barroso, British premier David Cameron and European Council president Herman Van Rompuy made statements to the press.

But the big talking point on Day One was Syria, which pushed economic matters down the pecking order. At issue is the gathering western push for a change of heart from the unsmiling Vladimir Putin, who bore the appearance yesterday of a man who was not entirely delighted to be around.

After the Russian president skipped the 2012 summit, there were doubts last week as to whether he would even stay the night for the proceedings today.

Faced with a succession of high moral demands for a new direction, Putin has rubbished the revolution in Syria. Citing video images of one anti-government fighter apparently biting into the heart of a regime soldier, he has said there is no cause to arm the rebels or to create a no-fly zone over the country.

Setting the tone
As he arrived in Fermanagh, French president François Hollande set the tone for icy exchanges in the summit room. "How can we allow that Russia continues to deliver arms to the Bashar al-Assad regime when the opposition receives very few and is being massacred?"

At the same time, Cameron said he was mindful of concerns about the worst of the rebels. “Let’s be clear – I am as worried as anybody else about elements of the Syrian opposition, who are extremists, who support terrorism and who are a great danger to our world.”

As host of the summit and holder of the G8 presidency, it is of course in Cameron’s interest to bring everyone towards the same line. But with Obama and Putin now moving in opposite directions, the big question last night was whether any easing of the tension was in prospect.

The stakes are high, and rising all the time. Van Rompuy said the debacle threatens the wider Middle East. “The EU is convinced that we are at a critical juncture, after tens of thousands of deaths, millions of displaced and refugees, we are in front of a fractured and radicalises Syria.”

There would be no military solution, Van Rompuy insisted, and added that a stalled US-Russian initiative to launch formal political negotiations was the "only possible chance" to halt the conflict. Quite what the man from Moscow made of that can only be guessed at.

This was not the only contentious item in Lough Erne. An interview with Borroso appeared overnight in the New York Times in which he accused France of poor form over its push to protect its audio-visual sector in trade talks with the US. "Some say they belong to the left, but in fact they are culturally extremely reactionary," he said.

This drew a dismissive response from Hollande, who was already in testy form over Syria. "I do not want to believe that the president of the European Commission could have made these statements on France."

'More transparency'
At the same time, German chancellor Angela Merkel made it clear that she wanted to raise allegations of mass online surveillance by US security agencies with Obama.

Dr Merkel wants “more transparency” but the sense was yesterday that the president has other things on his mind. This one might have to wait until Obama travels onwards to Berlin today when Lough Erne talks conclude.