In a victory for corporate taxes everywhere, Apple has been ordered to pay as much as €13 billion ($14.7 billion) in back taxes to Ireland. Or, perhaps, in a loss for workers everywhere, a reluctant Ireland is forced to go back on its agreement with Apple to base its European operations there in exchange for much needed tax breaks. Or, perhaps, corporate tax harmonization has been dealt a terrible setback as the European Union (EU) has claimed their turf in what should be hammered out through an international agreement.
What we do know for sure is the massive penalty, the largest ever imposed, is a big blow to Apple, amounting to …. around 7% of their massive $200 billion cash reserves. Unless, of course, the Republic of Ireland can justify a smaller bill, which they are very much keen to do. So nevermind.
Like corporate taxes themselves, today’s big story is completely negotiable and dependent on your perspective. There will be more to this, but nothing even remotely obvious will happen in the immediate future.
If you’re having trouble figuring out what’s going on in the world you’re in good company. The global economy has been undergoing rapid change for a number of years but global politics has been a bit slow to catch up to it.
A few items that Barataria has covered recently have entered new phases recently – unpredictable, rapidly changing phases that show that things are indeed coming to a head. We’ve consistently called 2017 as “The Year Everything Changes” for a number of reasons, but the lead-up to that year is proving to be especially chaotic. Here are updates to three stories we’ve been all over that should take surprising turns in the next year and a half. You read it here first!
On Sunday, 5 July, voters in Greece will head to the polls on an utterly unique referendum on a proposed bailout. The process is non binding, the question itself is strange, and the consequences of it are completely unknown.
What does any of it mean? The short answer is that Greece, and all of Europe, are in completely uncharted territory at this point. The five year crisis has gone from slow simmer to a full boil in the hot summer sun. Greece is calling Europe’s bluff, and Europe is not backing down. The only thing we can be sure of is that there will be a resolution shortly, one way or the other. What exactly that means is itself completely up in the air as well.
Here are a few questions and answers on the Greek Crisis based on a variety of news sources. Follow the links for more information in each question.
A game of chess has been waged for decades over a part of the world that has seen more than its share of similar games over the last 2,000 years. Turkey, as the crossroads between continents, has always been at the heart of many games of geopolitical intrigue that have sometimes flared into war. Lately, however, the flares have been gasflares ignited along its periphery – valuable fuel often burned as a by-product with nowhere to go.
The game this time is all about putting a pipeline across Turkey to bring that natural gas into Europe. And for a variety of odd reasons, March is a critical month for how it will be played out. The key players are all sources of natural gas – Russia, Iran, and Israel. We will likely know in a month just who wins and who loses.
What is this thing we call the “Europe”? Is it an aspiration or a government? Is it a business agreement or a marriage? Is it simply a mass of land that many different people share?
While Ukraine fights a nasty civil war over the desire by many to join Europe, the UK is starting to question whether it belongs. Where the European Central Bank (ECB) has given its stamp of approval or withheld it for many important banks a scramble has taken place to comply at all cost.
Whatever it is, Europe has always moved in many directions at once. The last few months even moreso.
Ukraine heated up this weekend when Russian troops invaded Crimea and backed the unrecognized Prime Minister Sergey Aksyonov, who has declared the province is now independent from Ukraine. The situation essentially pits all of Europe against Russia, with the Ukrainian people caught in the middle. It feels like the way something like World War III might start for good reasons.
Russia cannot let Ukraine go over to the West for many reasons and has been playing every card in their deck. This situation started on 21 November when Ukrainian President Yanukovych backed out of a deal to join a European Union “Eastern Partnership” under Russian pressure. Russia then sent a $15B emergency loan to Ukraine, more or less paying Ukraine to be their friend. The people of Ukraine rose in protest, eventually ousting Yanukovych and declaring an interim government with limited legitimacy.
There is a lot of background necessary to understand this from a Ukrainian, Russian, and European Union perspective. Much of this is unfinished business from the breakup of the Soviet Union in 1991, but the tortured history goes back much further.
Now that the Eurozone Crisis is over, we can all breathe a little easier. Right? While it’s good to not be loping along from one crisis to the next, the aftermath of the flood that lasted from 2008-2012 in drips and drops is still being mopped up. The hits are just being absorbed by the banks and growth is going to be sub-par through 2014, meaning that the lingering unemployment problem is not going away.
There are two parts left to this clean-up – what comes next and what can we learn? They are both important and will dominate 2014 in Europe and the developed world.