When Europe’s leaders gathered in Brussels at the end of June, they decided to break the ‘vicious circle’ between bust banks and the countries that host them. Otherwise, the fear was that its banks could bring down Spain much as happened in Ireland.
Importantly, and in line with long-standing EU practice, it was agreed that favorable terms applied to Spain would be applied retrospectively to Ireland. Moreover, the Irish bailout was to be looked at with a view to ‘improving its sustainability’, recognizing implicitly that it was not on a sustainable path as things stood.
The agreement was hailed as a ‘game changer’ by some, a ‘seismic shift’ by others, and universally as at least a step in the right direction. Partly in expectation of a deal on its bank debt, Irish benchmark borrowing rates have fallen below 5% to levels not seen since before the 2010 bailout. Continue reading →
While working with the World Bank over the summer, I contributed to this in-depth report on the state of Indonesia’s manufacturing sector, which has just been published.
Having never fully recovered its dynamism after the Asian financial crisis, now is the ideal moment for Indonesia’s manufacturing sector to recapture its former glory. With recent improvements and a favorable outlook, the sector may be on the verge of a renaissance if critical competitiveness challenges can be overcome. Continue reading →
On the second working day of every month, the Department of Finance publishes the exchequer returns – a summary of the income, expenditure and deficit position of the country in the year to date. At the end or each quarter – so April, July, October and January – they publish the figures with the fanfare of a press conference. Yesterday, they published returns for the first nine months of this year.
So, what do the figures tell us?
- Tax revenues are up on the back of tax hikes in last two budgets. Of all the major tax headings, corporation tax increased the most in percentage terms, from EUR 2.1bn to EUR 2.5bn, while income tax receipts increased the most in cash terms, from EUR 9.3 to EUR 10.4bn. Continue reading →