In the shadow of Donald Trump’s spree of controversial actions, the European commission has quietly launched the next offensive in the war on cash. These unelected bureaucrats have boldly asserted their intention to crack down on paper transactions across the E.U. and solidify a trend that has been gaining momentum for years.
The financial uncertainty amplified by Brexit has incentivized governments throughout Europe to seize further control over their banking systems. France and Spain have already criminalized cash transactions above a certain limit, but now the commission has unilaterally established new regulations that will affect the entire union. The fear of physical money flowing out of the trade bloc has manifested a draconian response from the State.
The European Action Plan doesn’t mention a specific dollar amount for restrictions, but as expected, their reasoning for the move is to thwart money laundering and the financing of terrorism. Border checks between countries have already been bolstered to help implement these new standards on hard assets. Although these end goals are plausible, there are other clear motivations for governments to target paper money that aren’t as noble.
These are challenging times for the European economy, with Brexit looming and the Greek bailout again becoming the focus of attention. But the issue dominating concerns in Brussels and Frankfurt is the state of the European banking sector.
Europe’s banking woes dominated debate on the fringes of last week’s annual autumn meeting of the IMF and World Bank in Washington, with senior bankers and policymakers from both sides of the Atlantic pitching-in with the latest take on the sector.
The IMF said that euro zone lenders threatened to undermine the global economy, while senior figures in US banking such as Goldman Sachs president Gary Cohn contrasted the current state of European banks with their US counterparts, who are “in the best shape ever”.
Despite the low profitability of the sector and the continuing problems in Italian banks in particular, the travails of Deutsche Bank have really propelled the issue into the spotlight.
Last month the German government was forced to deny it would bail out its biggest bank after concerns about the ability of it to absorb a fine of up to $14 billion €12.4 billion) levied by the US justice department over its misselling of mortgage-backed securities.
Deutsche Bank, which only just scraped through European bank stress tests in July, is now facing reports that it was given special treatment by the European Banking Authority (EBA) after the European Central Bank (ECB) granted the bank a special concession. This allowed it to include the proceeds from selling its stake in a Chinese bank to boost its stress test results, even though the deal has yet to go through.
The bank is now in the process of devising a restructuring plan, which may involve a flotation of its asset management unit, according to some reports.
Labour spin doctor, Alastair Campbell Slammed the Prime Minister for Revealing the Article 50 Timing. Others have done the same.
Timing of the article 50 announcement, by March 2017, is ahead of French and German elections. Politicians will have elections, not Brexit on their minds.
Many blame Theresa May because it will take time off the negotiations.
Politically speaking, May knows precisely what she is doing.
hose who think otherwise, need to consider how well she has rounded up support in many quarters by offering something to everyone: UK Prime Minister Attacks QE, Irresponsible Capitalism, Tax-Dodging Companies.
The date was carefully timed, precisely to put pressure on Angela Merkel by German car manufacturers (European car manufacturers and businesses in general), telling Merkel to go easy.
Fitch Ratings has become the latest major rating agency to say UK-based banks and financial services firms can cope with losing their much-cherished ability to “passport” their services in the EU following the Brexit vote.
Should British banks lose their ability to operate across the continent with an EU-wide passport – a “worst case outcome” – the agency said it would not provoke any major change on lenders’ ratings.
“We believe the costs and disruption are likely to be manageable in the context of banks’ overall credit profiles,” said James Longsdon at Fitch.
The findings follow a similar verdict from rival agency Moody’s, which has called the loss of passporting rights as broadly “manageable” for the sector.
In the event the passport is lost, both agencies have touted the possibility of British banks using incoming European market rules, known as Mifid II, as easing the process of doing business on the continent following the UK’s exit.
Apple expects to pay billions of dollars of extra taxes in the US next year when it brings home the offshore cash pile at the centre of its row with Brussels, the technology company’s chief executive said on Thursday.
Tim Cook told Ireland’s national broadcaster RTE that Apple had set aside “several billion dollars for the US for payment as soon as we repatriate” some or all of its $215bn in overseas cash.
“Right now, I would forecast that repatriation to occur next year,” he said. Mr Cook has previously said that returning those funds to the US was contingent on a new American president introducing corporate tax reform that would lower the current 35 per cent rate.
The row between Apple and Brussels over a €13bn tax penalty escalated on Thursday, as Mr Cook called the European Commission’s decision “invalid” and “crap” and urged the Irish government to appeal.
Dublin was ordered on Tuesday by the commission to claw back up to €13bn from Apple after its tax arrangements in Ireland were judged to constitute illegal state aid. Apple has said the funds will be paid into escrow until an appeal is heard.
Mr Cook lashed out at the commission’s claim that Apple paid only 0.005 per cent tax in Ireland in 2014, telling the Irish Independent newspaper that it was “total political crap”, adding: “They just picked a number from I don’t know where.”
In the aftermath of the EU’s latest escalation in its tax war with US multinational corporations, the rebuke from the US was swift, stretching from the US Treasury all the way to Congress: according to Kevin Brady, the House Ways and Means Chairman, the EU Apple decision was “predatory and naked tax grab.” Chuck Schumer, the third-ranking Senate Democrat on the committee, said that the EU is unfairly undermining U.S. companies’ ability to compete in Europe. Naturally, the Treasury also chimed in, and a spokesperson said that “the Commission’s actions could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the U.S. and the EU.”
Naturally, the US would confine itself only to heated words: after all, there was little chance Washington would do anything to truly jeopardize trade relations between the two core trading partners, and Europe knows it.
However, with Europe desperate to boost its dwindling public coffers and only beginning its anti-tax avoidance campaign, AAPL was merely the start in the European Commission’s crackdown. As the WSJ writes, following today’s ruling that Apple got an unfair advantage over its competitors because of help it got from Ireland government’s, the EU’s antitrust regulator is likely next to turn to two other ongoing tax investigations on its docket: Amazon.com and McDonald’s.
Ireland granted “undue tax benefits” of up to €13bn to Apple, the European Commission has said in a highly-anticipated ruling on Tuesday.
“This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid,” the commission said in a statement.
European competition commissioner Margrethe Vestager said:
Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014.
The European Commission has imposed more anti-dumping duties on Chinese and Russian steel imports and has applied the penalties retroactively for the first time, in a fresh move to protect the bloc’s producers.
The duties on cold-rolled steel, which is used to make cars and washing machines, range up to 22.1 per cent for Chinese imports and up to 36.1 per cent for Russian imports. The rates are a little higher than provisional penalties in place since February.
The European steel industry has long called for tougher EU anti-dumping duties, which aim to protect the bloc’s companies from ultra-cheap imports. Using a different calculation method, the US imposed tariffs in excess of 500 per cent on similar cold-rolled steel materials from China earlier this year.
The commission is planning further measures that would allow it to impose US-style tariffs against steel that is dumped at particularly low prices or subsidised.
“This shows the EU is starting to tackle the state-supported dumping of steel into the UK, but it’s still being outmuscled by Uncle Sam,” said Dominic King, head of policy at UK Steel, an industry group. Britain will need its own tariff regime once it leaves the EU to ensure that China and Russia do not “destroy” the UK steel industry, he added.
Reuters carrying a report from the Chinese Xinhua news agency 30 July 2016
EU Commission’s imposition of heavy anti-dumping duties on Chinese steel bars is “unjustifiable protection for the EU steel industry”
Xinhua is citing a statement from the Ministry of Commerce who expressed regret that the move came just weeks after the G20 meeting in China, where fin mins had committed to avoid protectionism.
China’s monthly steel imports rose to their second highest on record in June at 10.94mln tonnes despite on-going complaints of dumping from around the globe, notably US and Europe. The issue has been headline news in the UK with the close-down or proposed sales of a number of steel plants arising in many job losses.
Seems to me like the heavy anti-dumping duties from the EU are long overdue.
Senior ministers from EU member countries do not believe that Ireland plans to remain a part of the European Union, said Social Protection Minister Leo Varadkar.
Ireland’s Minister of Social Protection Leo Varadkar says that a number of his colleagues approached him at a recent EU meeting in Slovakia who did not realize “we’re staying in Europe,” in what may be a harbinger of things to come for the Island nation.
Citing a series of “unusual questions,” Varadkar says there is not a big diplomatic effort needed to reassure other countries that Ireland remains committed to staying in the European Union.
“Some of them were asking me ‘is Ireland going to leave the European Union as well?’ So I had to make it very clear that our place is in Europe, our home is in Europe,” said Varadkar.
“Europe is a big place now. There are 28 members and we’re a small country,” he said. “There’s a big diplomatic offensive underway now to first of all reassure everyone in politics, in business and everything else that Ireland made its decision a long time ago.”