Irish economy - are there clouds ahead?

whizzbang said:
From talking to people in Dell I think it is almost guaranteed. Just a matter of time really.
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Does anyone know what incentives are in place in Poland for multi-nationals? Have they special tax rates etc? Also how far are the EU from deciding that tax is due in the country where the profit was generated (i.e. Frnace Germany ) rather than reported (Ireland)?
 
StoppedClock said:
Does anyone know what incentives are in place in Poland for multi-nationals?
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Corporation tax is 19% as opposed to 12.5% here. Obviously it would have a lower cost base than Ireland. Other than that, I don't think it can offer any other incentives.

The question I ask is, would it be possible for Dell to move it's manufacturing base to Poland and keep a small office in Ireland to funnel it's profits in to?
 
joe sod said:
Students should be encouraged to do engineering and science for the benefit of this country and to try and generate a home grown technology industry. The reason why less people are doing these courses at third level is because they are among the toughest and most demanding courses..........

Also what would be the point in having arts courses if you forced engineering and science students to study some of their couses also. The logical follow up to this would be to force arts students to study some engineering and science courses and thats where this argument dies
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Excellent points joe. I'm a recent science graduate (living abroad obviously!) who can attest that to learn a foreign language on top of my 4-yr degree course would have meant either;
a) lower standard of science degree
b) spending an extra two years at least in college
AND still coming out of third-level education with a pitifully low salaries compared to other graduates.
Learning a language should mean more than just expanding your CV catchment area (as it happens I'm learning Japanese now for no other reason than I enjoy the challenge)
 
Raskolnikov said:
The question I ask is, would it be possible for Dell to move it's manufacturing base to Poland and keep a small office in Ireland to funnel it's profits in to?
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I believe they will still have their sales/services wing run out of Cherrywood, it's just the Limerick manufacturing that would be effected I believe.
 
I'd imagine Dell will do something similar to what APC did in Galway earlier this summer - move the manufacturing to a cheaper location and keep the higher-tec jobs in Ireland (for now at least). That way they'll be able to keep to tax breaks and the government can bleat about how we're moving 'up the value chain' towards being a 'knowledge economy' blah blah.

We'll see more of this kind of thing in the future.

For a manufacturing plant it surely makes far more sense to be based in central europe if you're deliverying product around the continent. all the raw material has to come here by air or sea and the finished goods leave the same way. With fuel prices so high this has got to increase an already significant overhead.
 
Jimoslimos said:
Excellent points joe. I'm a recent science graduate (living abroad obviously!) who can attest that to learn a foreign language on top of my 4-yr degree course would have meant either;
a) lower standard of science degree
b) spending an extra two years at least in college
AND still coming out of third-level education with a pitifully low salaries compared to other graduates.
Learning a language should mean more than just expanding your CV catchment area (as it happens I'm learning Japanese now for no other reason than I enjoy the challenge)
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I agree that learning a language from scratch would take at least two years.

However, it is a requirement of most college courses, including science (at UCD anyway) to have at least a d3 in a language other than Irish and English, so no-one should be starting a language from scratch. Unless of course they sat Latin or Greek :)

One language module for 4 years, even if it is just an hour or two a week, would surely bring your language skills up a level.

Fact is, if you have language skills it makes it easier to get a job in the soi-disant ;) knowledge economy and, as you say, it expands your cv catchment area.
 
Absolutely woeful article by Johns Beggs (AIB Economist) in today's Irish Times, declaring that a slowdown in housing need not mean trouble for the economy.

His "arguments" are virtually non-existent and amount to a few half-hearted projection figures, almost aimlessly trotted out. He does not appear to make any suggestions as to what areas of the economy will pick up the slack when this main driver of growth is removed.
 
Bedsit said:
I would suspect that Dell will follow suit in the next few months ...
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Further to my last post, two articles that appeared in the Sunday Business Post on the 10th of September:

Intel Ireland waits for next move
[broken link removed]

Dell under pressure
[broken link removed]
 
Bedsit said:
Further to my last post, two articles that appeared in the Sunday Business Post on the 10th of September:

Intel Ireland waits for next move
[broken link removed]

Dell under pressure
[broken link removed]
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Today might be another bad day for DELL on the US stock market:

irregularities
 
This is a bad week for the irish economy with alot of real economy jobs lost. It shows that allowing the construction boom to drive wages and inflation is going to cost us alot of jobs where wages need to be competitive. Long term some of these jobs would go anyway however IMO we have greatly accelerated the rates at which companys are taking the tough decisions.
 
Last edited:
From todays Irish Times.(not full article)

The economic boom has been fuelled by domestic demand because easy credit has over-stimulated personal consumption, Pat Crotty said at the SFA's annual conference in Dublin Castle.
At the same time, the value of our exports last year was 5 per cent below the 2002 level and Ireland is losing share of the European Union's total exports.
"Amidst all the euphoria about rising house prices, SSIAs and buoyant consumer spending, it has almost gone unnoticed that the traded sectors of our economy are in recession," Mr Crotty said. While exports of goods and services accounted for a major part of our income growth at the start of the decade, net exports had a negative impact on economic growth by 2005 and some 30,000 manufacturing jobs have been lost in the last four years.
Ireland's economic boom is now entirely dependant on domestic demand, a source of growth that is unsustainable, the SFA chairman warned.
"In the recent past, the Irish nation has been behaving more like a drug addict than a well-oiled business - high on cheap money," he said.
© The Irish Times
 
Any analysis of what would happen to tax receipts and rates etc to finance govt in event of say medium slowdown in residential property market and related development market etc ? How would gap be financed as govt borrowing has to meet eu requirements ?
 
Maine said:
Any analysis of what would happen to tax receipts and rates etc to finance govt in event of say medium slowdown in residential property market and related development market etc ? How would gap be financed as govt borrowing has to meet eu requirements ?
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The short answer is that there is very little that can be done. I believe that we will again see a 1977 give away budget in an attempt to keep the party going. On a recent trip overseas, I was told by a banker that " Irish people will have to learn that they are not immune to the laws of economics" A return to the nightmare that was Ireland in the 80's is a very real possibility. Debt is the time bomb that is ticking underneath the foundation of our whole way of life. We really are in unchartered waters.
 
kerrybull said:
The short answer is that there is very little that can be done. I believe that we will again see a 1977 give away budget in an attempt to keep the party going. On a recent trip overseas, I was told by a banker that " Irish people will have to learn that they are not immune to the laws of economics" A return to the nightmare that was Ireland in the 80's is a very real possibility. Debt is the time bomb that is ticking underneath the foundation of our whole way of life. We really are in unchartered waters.
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IMO the govt has committed itself to levels of expenditure that going forward we will not be able to pay for without significant levels of tax increases. During the current Japanese bubble bursting they borrowing mountains of debt to keep the economy going, however Ireland is bound by the EU borrowing rules and cannot go that route. Hence the only escape route is higher taxes. So just as the economy is heading south the govt will have to start raising additional taxes squeezing and making a bad situation worse. Falling real wages due to higher taxes will drive house prices even lower.

Although no one says it the euro may in hindsight been the wrong option for ireland given our cycle was out of whack with Germany. The UK was been proven right in staying out without any ill effect. Lower EU rates in the UK would also have driven its property market to stupid heights. They have avoided most of that.
 
The Euro interest rates might not have been so low had the UK joined the Euro. The UK figures would have had the same influence as the French or German ones in determining the interest rates (unlike Irish figures which are of negligible importance).

I still think that if things get really grim here, the government of the day might think about withdrawing from the Euro.
 
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