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TTIP far from certain as EP begins to voice its concernsCillian DonnellyCillian Donnelly

Posted 27/02/2015

By Cillian Donnelly

The ongoing controversy over the Trans-Atlantic Trade and Partnership Agreement (TTIP), the proposed flagship trade deal between the EU and the US, kick-started again this week when members of the European Parliament put forward their proposals for how such a sensitive deal should be conducted.

In all, 10 of the 13 affected parliamentary committees put forward their opinions on the deal, which, if agreed, will be the biggest trade deal signed between global partners yet.


There is a lot riding on a successful deal, say advocates. The European Commission estimates that with the deal European citizens will be, on average, € 545 per year. The US also estimates a windfall for its citizens.

However, opposition has been persistent in Europe, with fears that the deal will give rights to certain corporate interests to challenge the terms of the deal if profits are being threatened.

This concern relates to the investor-state dispute settlement (ISDS) clause, which allow for private companies to sue if it feels as though its profits are potentially hampered by such a trade deal. Recently, the spectre of TTIP was raised when a global tobacco firm, Japan Tobacco Group Ireland (JTI), threatened to sue the Irish government over plain packaging legislation.

Many fear that if TTIP is passed, this will be the norm; multi-nationals holding sway over sovereign decisions. The common sentiment is that the deal is a Trojan horse that allows corporate interests a say in political decision-making.

EU Trade Commissioner, Cecilia MalmströmEU Trade Commissioner, Cecilia MalmströmThe current EU Trade Commissioner, Cecilia Malmström, is not one who shares such sentiments. In a recent op-ed, she wrote that pushing for increased global trade, in that it secures jobs and growth, is a “no brainer.” In the same op-ed, published in the UK's Guardian newspaper on the 16th of February, she dismissed the fears over ISDS, suggesting that it is the latest in an evolving trade global relationship that should not be halted now.

“A hotly debated issue in the public debate on TTIP is ISDS, or investor-state dispute settlement – a mechanism for arbitration which has been around since the 1950s, to ensure that investors are treated fairly,” she wrote. “It is in our interest to have an international system that ensures legal certainty, transparency and accountability, and we are now carefully examining how a TTIP deal on investor protection could strike the right balance.”


Many disagree. The European Parliament, which has joint negotiating powers with the European Council on final legislation, is currently debating the deal at committee stage. The development committee was first to vote on the current draft text this week – it recommends a binding clause relating to protection of development goals. The same day (Tuesday) the international trade committee, which is leading on the portfolio, were split along the question of the ISDS.

The full Parliament, taking into account all the relevant committee opinions, will vote on whether or not to endorse the deal in May.

As with perhaps the most comparable recent piece of legislation, the Anti-Counterfeiting Trade Agreement (ACTA), which was defeated by a motley crew of right-and left-wing MEPs, TTIP may face the same kind of battle.

The centre-right and centre-left parties are coming around to the same way of thinking, but there is a big proportion of unfriendly voices on both sides of the house that may still scupper this most grand of trade deals.


By Cillian Donnelly for EU Spectator



Green light for SME financing before the summer


Posted 17/02/2015

Following a decision by the Board of Governors of the European Investment Bank (EIB) today, small and medium-sized companies (SMEs) across Europe will be able to benefit from the first funds from the new European Fund for Strategic Investments (EFSI) before the summer.

The landmark decision taken today by the EIB Board of Governors will allow for the pre-financing of SME projects linked to the Investment Plan for Europe before the summer.

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness and steering the Investment Plan´s implementation, participated in the EIB Board of Governors meeting and welcomed the decision: "This is a great day for European small businesses. This news from the EIB means that by the summer, cash-starved SMEs and innovative mid-caps across Europe could be benefitting from an injection of badly-needed capital. We have said that we want to help get Europe investing again - and today we are doing exactly that."

The money can be made available to SMEs by the European Investment Fund (EIF), part of the EIB-Group, which will cover the risk of transactions with intermediaries providing additional finance to SMEs and small mid-caps until the main EFSI is in place.

The EFSI – at the heart of the Investment Plan - should be up and running by September 2015 at the latest. Infrastructure projects may also benefit from similar pre-financing arrangements before EFSI is fully set up, but later than SMEs.

The timing for the implementing of the Investment Plan is as follows: it is aimed to adopt the draft EFSI regulation by July 2015 - at the latest - so that the EFSI can be established no later than September 2015 and funds can start flowing into, for example, infrastructure investments in transport, digital, telecoms as well as hospitals and schools by the autumn.

Work on the other parts of the Investment Plan, including the establishment of a transparent project pipeline of European investment opportunities and a European Investment Advisory Hub (EIAH), is being fast-tracked to ensure that these are ready by the time the EFSI is active.


The Commission's 2015 Work Programme has set an ambitious agenda to remove regulatory barriers to investment and to strengthen the Single Market. As a first important step in the context of removing barriers and increasing access to finance, notably for SMEs, the Commission plans to adopt shortly a Green Paper on the Capital Markets Union, launching a public consultation of all stakeholders.

Due to the economic and financial crisis, the level of investment in the EU has dropped by about 15% since its peak in 2007. Financial liquidity exists in the corporate sector. However, uncertainty as regards the economic outlook and high public and private debt in parts of the EU hold back investments.

That's why President Juncker made the Investment Plan for Europe his first priority, presenting it after just over three weeks in office on 26 November 2014. The Plan will mobilise at least € 315 billion in private and public investment across the European Union. This will especially support strategic investments, such as in broadband and energy networks, as well as smaller companies with fewer than 3000 employees.








Battle of the ‘Mac’ burgers - trademark warsRandall CalvinRandall Calvin


Posted on 10/02/2015

By Randall Calvin

McDonald's wants the EU to stop Supermac's using its name across Europe

McDonald's has lodged a comprehensive 41-page objection to the EU Office for Harmonisation in the Internal Market against Supermac's application to register the 'Supermac's' trademark across Europe.

Supermac's say that it "is currently looking at opportunities to open in the UK," and the Irish company is already facing a trademark challenge from the fast food giant in Australia.


Supermac's is Ireland's largest indigenous fast-food chain with a large percentage of the outlets franchised. Many hold the same format of a two-storey restaurant, with plastic seating and the serving counter downstairs and more seating upstairs, sometimes with a children's play area.

The outlet's opening hours generally range from mid-morning to the post-pub closing rush.

The first Supermac's opened its doors in 1978 in Main Street, Ballinasloe, County Galway, Republic of Ireland. It was founded by former school teacher Pat McDonagh after he failed to get planning permission for a pool hall in the same town.


Supermac’s ‘Mighty Mac’ vs McDonald’s ‘Big Mac.’

The US-firm is arguing that the use of the name could create confusion - and that it would "take unfair advantage of the distinctive character and repute of" McDonalds’ trademarks.

Part of the objection is based on McDonald's existing trademarks like 'Big Mac.'

McDonald's argues that the likelihood of the name causing confusion is "even more likely since the goods and services of the respective parties are identical or at least highly similar."

Supermac's have released a statement titled: "Supermac’s…it’s not McDonald’s."


Supermac's stores in IrelandSupermac's stores in Ireland

The company says that the chains have, "two very distinctive brands with immediately identifiable menus and a clear difference in ingredients and taste," and that "there has never been any confusion for our customers."

The Galway-based company's managing director, Pat McDonagh has described McDonald’s objection as 'spurious' - citing the fact that both brands have co-existed in Ireland since the 1970's.

He adds: "The Supermac’s name was a most obvious choice for our first restaurant when it was given to me as a nickname during a gaelic football match I played with my secondary school Carmelite College."

Supermac's is preparing a formal response to McDonald's objections.

McDonald's has a track record of successes in similar cases - MacJoy in the Philippines, McCoffee in the US and McMunchies in Scotland were all forced to change their names under legal pressure from the US giant.

Supermac's has over 2,500 employees in 103 branches, and growing -today it serves an average of over 320,000 customers a week.

David and Goliath comes to mind, but most likely Goliath will come off best this time.

McDonald's has a track record of successes in similar cases - MacJoy in the Philippines, McCoffee in the US and McMunchies in Scotland were all forced to change their names under legal pressure from the US giant.

However one wonders why McDonalds are taking this action now, as the two companies have lived and competed side by side in Ireland – along with Burger King, for years!


By Randall Calvin



The European Commission launches comprehensive investigation into the Belgian excess profit ruling system

Posted on 08/02/2015

The European Commission opened this week an in-depth investigation into a Belgian tax provision, which allows group companies to substantially reduce their corporation tax liability in Belgium on the basis of so-called "excess profit" tax rulings.

It seems that the so-called Luxleaks affair and its media repercussions have opened a witch hunt in the compliance with EU state aid rules of certain tax practices in certain Member States.


This very same week, the European Parliament downgraded a proposal to set up an inquiry committee on tax avoidance and fraud by multinationals in Luxembourg, exonerating the top bureaucrat Jean-Claud Juncker of any role he might have had setting up tax deals between Luxembourg and multinational companies. The decision was based, in part, on a non-binding negative recommendation from the Parliament’s legal services, which deemed the original proposal legally unsound.


The spokesman from the European Green party, which put forward the inquiry proposal, was far from pleased with the decision as a minority of MEPs were denied an inquiry by party leaders. The decision, he said, should have been taken at the plenary instead.





In the Belgian case, the rulings allow multinational entities in Belgium to reduce their corporate tax liability by "excess profits" that allegedly result from the advantage of being part of a multinational group. At this stage, the Commission has doubts if the tax provision complies with EU state aid rules, which prohibit the granting to certain companies of selective advantages that distort competition in the Single Market. According to the Commission, the launch of an exhaustive investigation will provide interested third parties an opportunity to submit comments, without prejudging the outcome of the investigation.

Commissioner Margrethe Vestager in charge of Competition Commissioner Margrethe Vestager in charge of Competition Commissioner Margrethe Vestager in charge of competition policy said: "The Belgian ‘excess profit’ tax system appears to grant substantial tax reductions only to certain multinational companies that would not be available to stand-alone companies. If our concerns are confirmed, this generalised scheme would be a serious distortion of competition unduly benefitting a selected number of multinationals. As part of our efforts to ensure that all companies pay their fair share of tax, we have to investigate this further."

According to the Belgian authorities, this tax provision only implements the general OECD "arm's length" principle. However, at this stage the Commission has doubts that this interpretation of the OECD principle is valid.

The deductions granted through the excess profit ruling system usually amount to more than 50% of the profits covered by the tax ruling and can sometimes reach 90%.

Moreover, the Commission's assessment so far concludes that the Belgian "excess profit" tax system cannot be justified by the objective to prevent double taxation. This is because the deductions in Belgium do not correspond to a claim from another country to tax the same profits.

Having examined past administrative practice, the Commission notes that these tax rulings are often granted to companies that have relocated a substantial part of their activities to Belgium or that have made significant investments in Belgium.

The Commission will now investigate further to conclude if its doubts are justified.

But Belgium is not the only country under the Commission magnifying glass of tax compliance, the Luxleaks scandal awoke European bureaucrats to stand firm and try to crack down on certain tax practices in the interest of the EU’s infallibility competition laws. One thing is clear, at least in the Luxleaks case, the presumption of innocence has prevailed, at least for Mr Juncker.



ECB approves €60bn in emergency liquidity for Greece


Posted 05/02/2015

The European Central Bank has given the green light to make up to € 60 billion in emergency liquidity available to Greek banks, according to a source close to a national central bank.

Greece's borrowing rate has soared above the symbolic level of 10%, after the ECB last night moved to restrict the country's banks' access to a key source of cash.


The ECB cancelled its acceptance of Greek bonds in return for funding, shifting the burden onto the Athens central bank to finance its lenders and isolating Greece unless it strikes a new reform deal.

Greek debt has a junk credit rating and, under ECB rules, should not qualify as collateral for loans.

However, because of Greece's dire economic situation, it had been granted a waiver to that rule as long as Athens was deemed to be in compliance with the terms of its € 240 billion EU-IMF bailout.

Reacting to the ECB's decision to end that exemption, the yield on Greek 10-year bonds had hit 10.051% on the secondary market this morning, up from 9.678% yesterday.

Meanwhile, the country's Athex stock exchange fell by more than 9% in early trading to 768 points, before gaining slightly.


In an interview with French daily Les Echoson, ECB chief economist Peter Praet defended the move, saying the bank was being transparent and simply applying its rules.

"The conditions of access to liquidity from the European Central Bank are clear," Mr Praet said when asked about yesterday’s decision.               "If the conditions are not met anymore, the ECB must draw the consequences."

Mr Praet said he was "not satisfied" with the current situation regarding monitoring of Greece by the Troika, but did not specify what changes he would like to see.

He also said there were the first indications of improvement of financial conditions in the euro zone, which he saw as a sign that the central bank's quantitative easing plan announced in January would work.

The euro exchange rate now better reflected the divergent economic situation between the euro zone and United States, he said, adding that the ECB could do more than QE if necessary but that he was confident QE would be effective.