Courtesy of Mish.
What’s the real populist risk: Donald Trump and Nigel Farage?
How about the ECB, the European Commission, and the French authorities?
Perhaps a few headline stories can help answer the question.
ECB Warns of Populist Risk to Financial Stability
The Financial Times reports ECB Warns of Populist Risk to Financial Stability.
The ECB said in the latest edition of its twice-yearly Financial Stability Review that a rise in political risk “pose[s] a challenge to fiscal and structural reform implementation and, by extension, public debt sustainability”.
The report was published a day after Norbert Hofer of Austria’s Freedom party narrowly failed to become Europe’s first far-right head of state since the second world war, falling short in the country’s presidential election by just over 30,000 votes.
Years of high unemployment and weak growth have contributed to the rise of populist anti-establishment parties in many parts of the region, including the far-right National Front in France and Spain’s leftwing Podemos party. In some countries, such as Austria, the rise of the populist right also comes in the wake of an unprecedented surge of migrants.
French Authorities Raid Google
Also from the Financial Time front page, please consider Google’s Paris Offices Raided by French authorities in Tax Probe.
French prosecutors have turned up the heat in the spreading European tax war against US tech giants, with an early-morning raid on Tuesday on Google’s Paris office.
The raid involved 25 data experts and was part of a preliminary investigation into aggravated tax fraud opened in June last year, the French authorities said.
France’s aggressive stance comes in stark contrast to the tax accommodation that Google struck with the UK earlier this year. Though the UK is the internet company’s second-biggest market, it reached a settlement that will require it to pay only an extra £130m in back taxes dating back to 2005, an amount that was condemned as a “sweetheart deal” by the opposition Labour party.
In a statement, the French financial prosecutor’s office said: “The investigation aims to verify whether Google Ireland Ltd has a permanent base in France and if, by not declaring parts of its activities carried out in France, it failed its fiscal obligations, including on corporate tax and value added tax.”
The dispute revives a long-running French attempt to force internet companies to pay more tax. Prosecutors raided Google’s Paris office in 2011 as part of a similar investigation into whether the company should be ruled to have a “permanent establishment” in France, something that would preclude it from routing its advertising sales through Dublin. But the company is likely to argue that it would not have extra tax to pay even if the Irish business was found to trade in France.
EU launches Revolution in the VAT Rate
