FRANCO-GERMAN TAX PLANS FACE OPPOSITION - The Irish Examiner says a French and German paper to convince the EU to harmonise corporate tax rates has faced stiff opposition from a number of countries, including Austria, which described it as a "missile".
The paper says several countries warned that such moves could increase corporate rates and damage tax competition between member states. Ireland has agreed to discuss constructively tax issues but is implacably opposed to harmonising either corporate tax rates or agreeing a common consolidate base on which they are calculated.
The Examiner says the euro zone's two largest economies presented their green paper to EU finance ministers in Brussels yesterday, setting out their plans to harmonise six areas relating to both tax base and rates gradually from 2013.
Harmonising tax systems is key to completing the single market, they argue, saying the different tax systems hinders growth, distorts competition, increases costs for business, and can lead to double taxation or double exemption. But Austrian finance minister Maria Fekter said she believed it would lead in the end to increased taxes for companies. "This is to the benefit of high-tax countries. This is a missile."
***
"JAIL FOR COMPETITION OFFENCES" CALL - The Irish Times reports on a suggestion that judges must start jailing business people convicted of serious competition law offences if cartels and price fixing in the Republic are to be tackled.
The paper says new legislation that increases sentences for such offences to 10 years from five is likely to be passed into law some time in the first half of the year.
Speaking at the Irish Society of European Law competition law forum last night, Declan Walsh, a lecturer in competition law at University College Cork, warned that the courts must impose the new sentences. While more than 30 people have been convicted of these crimes in the Republic, none has been jailed.
Mr Walsh argued that by increasing jail sentences for competition law offences, the legislature is making it clear that it regards them as very serious crimes. As a result, judges are obliged to start jailing competition law offenders.
***
BoI COULD HAVE RECEIVED €14 BILLION FROM CENTRAL BANK - The Irish Independent reports on recent filings from Bank of Ireland, which show that the bank could have drawn down as much as €14 billion from the Central Bank last year using a government guarantee as the only collateral.
The Indo says disclosures with Bank of Ireland's 2011 accounts show the Department of Finance guaranteed a "facility deed" that would have allowed the bank to receive as much as €14 billion from the Central Bank over the year.
The paper says Bank of Ireland does not set out exactly how the 'facility deed' works, but last year's accounts from Anglo Irish Bank show that its "facility deed" allowed Anglo to get "unsecured" money from the Central Bank of Ireland.
This "unsecured" money would not have had any collateral attached to it - meaning that the Government would be on the hook for the money if it were not repaid by the bank. This makes it different to the "letter of comfort" the Government was already known to be giving to cover the tens of billions of "exceptional" liquidity advanced by the Central Bank.
The "letter of comfort" involves borrowings which are primarily secured against assets that are ineligible for mainstream funding but which are nonetheless accepted by the Central Bank.
***
OSBORNE PRESSED TO CUT UK BUSINESS TAXES - The Financial Times says British Chancellor George Osborne has come under renewed pressure from the Conservative right to cut business taxes and simplify labour laws in next month's UK Budget.
Liam Fox, the former UK defence secretary, called for urgent action to deal with the "true horror" of the current government's economic inheritance.
Mr Fox, who the FT says has kept a low profile since his resignation in October, has returned to the political fray and put himself in the vanguard of a growing Tory campaign to push Mr Osborne to adopt more radical policies to promote growth.
In an article in the paper, Mr Fox joins fellow Tory MPs in demanding that Mr Osborne overcome Liberal Democrat resistance by deregulating the labour market. He also calls for spending cuts to fund lower employers' national insurance contributions.
