Downing Street will not be best pleased that Twitter has chosen Dublin not London as its European base. Dave and Boris invested in a joint Twitter charm offensive, with No. 10 briefing the Telegraph: “All that matters is that they come to London.” They didn’t and Ireland’s business Minister Richard Bruton says it “is a massive win and shows there is real ground for Ireland’s claim to be the internet capital of Europe”.
Twitter joins Google, Facebook, Microsoft, Linked-In, Zynga, PayPal, eBay, AOL and Yahoo in Dublin, where the internet hub is generating thousands of high-tech jobs of the future. Can you blame them? Lower corporation tax rates and lower personal tax rates made it an easy decision for Ali Rowghani, the chief financial officer of Twitter. The UK has to become more tax competitive if it wants to attract geographically mobile internet firms.
Fiscally Ireland is doing what has to be done, an expansionary fiscal contraction is well on its way, GDP growth is well above the €urozone average, there is a healthy trade surplus. If the Irish political elite would steel themselves to exit the €uro, implement a controlled default on the bank debts and re-introduce an Irish punt pegged loosely against a basket of $, £ and €, the country would be free to thrive again. With UK banks holding £133 billion of Irish debt (equal to 6% of UK GDP), much of which is secured against London property, Britain’s fate is far more closely tied up with Ireland than Greece. The €uro as we know it is doomed, it is in Britain’s interest to focus on its trading near neighbour and leave Greece to Germany.