Why Apple Needs to Worry More Than Goldman About Sinn Feinby
Sinn Fein's Doherty aiming to reassure global investors
Doherty says government should weigh Apple appeal decision
Sinn Fein has this message for bankers concerned that the party’s rise could threaten the nation’s economic recovery: relax.
Analysts from Goldman Sachs Group Inc to Commerzbank AG have said the party’s policies and the possibility it may play a role in government following the upcoming election could derail a recovery from the worst recession in the nation’s modern history.
“We don’t want to scare off investors and we wouldn’t,” the party’s finance spokesman Pearse Doherty, 38, said in an interview in a Dublin hotel opposite parliament on Tuesday. “We need to have wealth generated in the country.”
With an election due within three months, Irish Prime Minister Enda Kenny is seeking to portray the campaign as a battle between stability and chaos, represented by Sinn Fein and other left-wing parties. In an interview on Thursday in Davos, Kenny said that Sinn Fein in power could “devastate” the economy, and in March, Goldman Sachs compared the party’s policies to those of anti-austerity Greek party Syriza.
Sinn Fein “is not about being reckless with the economy,” said Doherty, pointing out the party is committed to the 12.5 percent company tax rate which has drawn companies ranging from Google Inc. to Facebook Inc. to Dublin. “We have no intention over the term of the government or any indications afterwards of raising the rate.”
He’s less reassuring toward Apple Inc. In government, Sinn Fein may pursue Apple for the taxes it could owe Ireland should the European Commission find against the company and the government in an ongoing probe, Doherty said. Apple has denied any wrongdoing.
Kenny’s administration is ready to fight any adverse decision. The world’s largest company could owe more than $8 billion in back taxes as a result of the investigation, according to Bloomberg Intelligence.
“It’s ridiculous in the extreme for the government to say no matter what the commission find, no matter how stark the evidence may be, that they’re going to appeal this,” Doherty said. “This would be tax that would be due from a company that is more wealthy than the entire Irish state.”
The party, once the political wing of the Irish Republican Army, is on track to double its support from the 2011 election to about 19 percent, polls indicate. Bookmaker Paddy Power Plc makes Feb. 26 favorite as the election day, with polls suggesting that no party will win a majority.
“Sinn Fein has managed to distance itself from its role in Northern Ireland by reinventing itself as an anti-austerity platform,” said Eurasia Group Ltd. analyst Charles Lichfield. “Like other populist parties in Europe, Sinn Fein has thrived on castigating center-ground politics.”
Doherty maintains that in government the party would be bound by European rules limiting the deficit. At the same time, Sinn Fein wants to abolish water charges and property tax and raise spending on health and housing.
Sinn Fein would pay for this using extra tax generated by the recovery, raise levies for incomes of above 100,000 euros ($109,000) and push the full costs of financial regulation onto the industry. Unlike Kenny, Sinn Fein would hold off the immediate sale of the government’s stake in Allied Irish Banks Plc, Doherty said.
The party’s rise should prompt concern from investors, Commerzbank said last month, which dubbed the Irish economy a “phoenix from the ashes.”
“We have our government ministers going to the United States and talking to
board rooms about how Sinn Fein would kill the economy,” said Doherty, urging analysts to contact him directly. “Never has any one of them lifted the phone to me and asked what is the fiscal stance.”