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Hedgeye, the company run by Keith McCullough, writes this morning that the European Union is attempting to force the country to give up its low corporate tax rate in exchange for a bailout.Hedgeye writes:
Euros are trying to do now is get the Irish (in exchange for being “rescued”) to give up low corp tax rate and fall in line with Europe
Hedgeye then follows by saying the rumour they’re hearing is that the Irish government intends to fight this part of the deal.
the Irish word on the street is that the gov’t is gonna take a hard line…call the europeans’ bluff and threaten to leave euro $$
Ireland’s corporate tax rate is 12.5%. To put that in context, Germany’s corporate tax rate averages 29.8% and France’s is 33.33%.
One of Ireland’s main competitive edges in Europe is its low corporate tax rates, which makes it a convenient headquarters for U.S. companies in Europe. Companies like Intel, Dell, and Glaxo Smithkline have huge offices in Ireland.
Defending its tax efficient crown might be more important to Ireland than remaining in the euro. The IMF-EU talks with Ireland will be a massive test for the idea of fiscal consolidation within the eurozone
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