EUROPE AGAIN HAS IRISH CORPORATION TAX IN ITS FOCUS - The leaders of France and Germany earlier this week unveiled far-reaching plans for closer euro zone integration and tighter debt rules, and they revived the idea of a financial transaction tax. Investors were disappointed that they would have to wait for word on any common eurobond, though France, especially, seems against it. Country by country reaction to the summit was mixed.

Markets analyst Paul Somerville says the summit had worrying consequences for Ireland, with Europe again going after our 12.5% corporation tax rate. He says that if ministers say otherwise, they are very much mistaken. Mr Sommerville says that German Chancellor Angela Merkel and Nicolas Sarkozy of France were playing to their domestic audiences on Tuesday and says the idea of a transaction tax - which is a very populist idea - will not actually ever be brought in. He says this is due to London's opposition to such a tax and if brought in would see financial jobs moving from the euro area to the UK.

On market reaction to the summit, the analyst says that markets will remain fairly calm for the rest of the month in quiet holiday trade. But he predicts more market turmoil for September and he says they were naive to think that Merkel and Sarkozy would mention eurobonds last Tuesday. Mr Sommerville says that markets go crazy and politicians come up with solutions when their backs are to the wall.

On IBEC's belief that measures taken to correct the economy are paying off and that the country is slowly trading its way to recovery, he says it is 'great to see IBEC in good humour'. But he says the reform process is so slow and the country has not yet tackled the big issues such as NAMA, the property market and reform of quangos. He says that IBEC is looking in the rear-view mirror, which markets look to the future.


MORNING BRIEFS - Talks between unions and management at Anglo Irish Bank will start today following the announcement that it plans to cut its workforce by 27% by the end of next year. Staff were told yesterday that the bank, which now also incorporates Irish Nationwide, wants to cut up to 350 jobs worldwide. It said it hoped to achieve the job cuts via a voluntary redundancy scheme, but did not rule out compulsory cuts.

*** The Canadian credit rating agency DBRS has cut Ireland's debt rating by one notch but kept its A grade status. This spares our banks a 5% penalty charge for using Irish bonds as collateral in return for European Central Bank funding. This is because the ECB looks at the highest of four agency ratings when assessing collateral, so the other three agencies lower ratings are not taken into account. DBRS downgraded Ireland's debt to A, or low, and put its trend on negative because of weaker-than-expected growth prospects. DBRS said the evolution of Ireland's ratings ultimately depends on the prospects for debt stabilisation. If fiscal targets are achieved and there is clear evidence of economic recovery, the trend could be changed to stable. The Toronto-based agency also changed its trends on Spanish debt to negative from stable. Moody's rates Ireland one notch below junk, while S&P and Fitch both rate Ireland at three notches above junk.

*** Shares in Dell fell by over 10% after the PC-maker slashed its sales growth forecasts blaming a 'more uncertain demand environment'. Dell said it now only expected revenues to rise by between 1-5%, down from 5-9%. But net income for the second quarter was $890m with net income rising a faster than expected 60%. The increased profits were due in part to Dell's expansion into higher margin businesses, like servers, data storage and computer services.

*** Japan's trade surplus widened more than expected in July, boosting optimism that the country's economy is continuing to recover. But the figures showed a bigger than forecast drop in exports, raising concerns about the strength of demand in key foreign markets. Exports fell for a fifth month in a row in July, down 3.3% from the same month a year earlier.

*** On the currency markets the euro is trading at $1.441 cents and 87.2 pence sterling.