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Nine United Nations principles that can help Greece and the Eurozone in 2017

Tiago Stichelmans

12 Jan 2017 10:57:29

Last December’s clash between the finance ministers of the Eurozone (the Eurogroup) and Greece shows how far we are from a long-term and sustainable solution to Greece’s debt issues. On 5 December, the Eurogroup endorsed proposals presented by the European Stability Mechanism (ESM) that will lead to symbolic debt relief and might represent up to a 20% debt reduction by 2060, according to the ESM. European governments did not take any further steps, however, as they remain divided on the future of Greece’s programme and most notably on the 3.5% fiscal surplus target after 2018. Even the International Monetary Fund (IMF), an organisation that can hardly be considered a radical leftist group, felt the need to clarify that it is not calling for more austerity for Greece and that the 3.5% ...

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Panama Papers amnesia causing headaches in EU: Member states reluctant to end secretive ownership

Jasper De Meyer

19 Dec 2016 17:50:07

This blog piece was jointly written with the Financial Transparency Coalition It was just nine months ago that countless business leaders, politicians and celebrities found themselves answering awkward questions about why their names appeared in leaked documents from Mossack Fonseca, a company known for setting up offshore business structures.  The leaks, which became known as the Panama Papers, gave a firsthand look at the murky world of offshore corporate structures, and the companies that help set them up. The investigation would be the catalyst for countless government probes, and even helped topple a government.  Perhaps most central and alarming about the revelations was the ease with which someone could open a company or trust and do so anonymously. ...

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Mozambique: future target of vulture funds?

Tiago Stichelmans

25 Nov 2016 12:10:15

Once considered an economic recovery miracle, Mozambique is now facing a debt crisis that puts its future in jeopardy. Restructuring its debt in the absence of an international sovereign debt restructuring mechanism will be tricky and vulture funds might use that opportunity to attack the country.  Is the Mozambican economic miracle over? In recent years, many saw Mozambique’s success story with great optimism. Despite the very low human development index of this former Portuguese colony, Mozambique’s economic potential was widely recognised. As with many emerging African economies, the important natural resources of Mozambique suddenly created a surge in investments and exports. In addition to its huge coal reserves, massive gas fields were discovered in the Indian Ocean waters bordering ...

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Complex structures and aggressive tax planning behind the Nicaragua Canal

Hernán Cortés Saenz

18 Nov 2016 13:04:05

A study – available only in Spanish – titled “Aggressive Tax Planning or Option Economy?: the case of the Hong Kong Nicaragua Canal Development Group,” analyses the ‘international tax rationale’ behind this megaproject that involves the creation of a structure with 16 companies located in jurisdictions such as Hong Kong, the Netherlands and the Cayman Islands. The conclusion is that the use of this multi-layered-structure seeks to avoid taxes. After being put on hold for decades, in 2013 the Nicaraguan government approved the Law 840 that awarded the licence for the construction of the canal, a free trade zone, two harbours and an airport to the Hong Kong Nicaragua Canal Development Investment Co. Limited – linked to the Cayman Island based group HKND Group.  The Law 840, ...

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Eurodad reaction to Council Conclusions on EU tax haven blacklist

Tove Ryding, Julia Ravenscroft

08 Nov 2016 18:18:38

Tuesday November 8 2016 Today, EU Member States discussed the creation of a tax haven blacklist during the Economic and Financial Affairs Council meeting in Brussels. Tove Maria Ryding, Tax Justice Coordinator at the European Network on Debt and Development (Eurodad), said: "The process for blacklisting countries remains highly political. The first thing the EU decided was that no EU countries can ever get blacklisted, despite the fact that several EU Member States are currently acting as tax havens. In the previous blacklist, 'EU friends', such as Switzerland and the United States, were also protected from blacklisting. This kind of double standard will not solve the problem, since tax dodging will just move from one tax haven to another. Furthermore, the EU won't gain much credibility ...

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Three principles for aid and the private sector

Jesse Griffiths

17 Oct 2016 16:32:59

Originally published by Public Finance International Using aid to mobilise trillions in private money is a hot and hugely controversial topic. Such aid is no different from any other kind: it can be well spent or badly spent and should meet basic effectiveness principles Donor governments are currently revising rules on Official Development Assistance (ODA or ‘aid’) so that the opportunities for using aid to leverage – or more accurately, subsidise – private companies and private investment could explode. This is, of course, hugely controversial, and Eurodad has warned that more care, thought and time should be devoted to such rule changes, involve recipients and stakeholders and be preceded by a firm commitment from donors not to tie aid to the use of their own firms. When we talk ...

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How far have we come on responsible finance standards?

Mathieu Vervynckt

22 Sep 2016 11:55:40

It’s been two years since Eurodad reported that for every $100 a developing country makes, $10 are lost, flowing out of the country. Although we’d been saying for many years that more money flows out of developing countries than goes in, I remember that the scale of it even came as a surprise to us.  But the reality is that developing countries continue to suffer from profits taken out by foreign investors, lending by developing countries to rich countries and particularly from illicit financial flows (IFFs). Last year’s “Mbeki report”, which had been commissioned by the African Union and the United Nations Economic Commission for Africa, estimated that Africa is losing more than $50 billion annually in IFFs. And, the report argued, “these estimates may well fall short of reality ...

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International public finance flows: 8 principles for transparent reporting

Jesse Griffiths

08 Sep 2016 14:19:02

How much public money does your country send to other countries, and for what purposes? The short answer is: we don’t know. The only reliable figures are those for the aid provided to help developing countries, collected by the Organization for Economic Cooperation and Development and called official development assistance. Unfortunately, even these figures are confusing, as they include large amounts of money that never leave the donor country, such as administrative costs and and the costs of accommodating refugees. A better place to look than the headline-grabbing ODA figures is a less well-known measure, called country programmable aid which the OECD says is “a better estimate of the volume of [ODA] resources transferred to developing countries.” But what about other official flows ...

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On debt and taxation, rich and poor countries are worlds apart

Tove Ryding

01 Aug 2016 12:49:10

This article was first published by the Guardian Following the promises of 2015, when governments adopted the sustainable development goals (SDGs) and a new agreement to combat climate change, many had hoped this year would herald an ambitious political atmosphere, with grand self-congratulatory speeches turned into concrete change. It was clearly with this in mind that the UN’s Conference on Trade and Development (Unctad) chose “From decisions to actions” as the slogan for its global conference, which took place in Kenya last week. All governments ought to be able to embrace the focus of Unctad – namely to help developing countries mobilise financing for development, and improve global economic governance. Unctad’s roles include helping poorer countries to benefit from trade, stabilise ...

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World Investment Report: Is private investment in developing countries increasing or falling?

Jesse Griffiths

30 Jun 2016 12:53:28

The always interesting World Investment Report, 2016 edition, came out last week, highlighting an increase in foreign direct investment (FDI) which is seemingly contrary to other reports of an outward flood of private finance, and highlighting the continued rise of international investment treaties, and resulting cases brought by companies against developing countries.  Did FDI rise or fall in 2015? As I’ve pointed out before, interpreting FDI figures takes a lot of care, as not all of it is foreign, and not all is investment, and the routing of investment through tax havens over-inflates and distorts the figures. However, in broad terms, UNCTAD (the United Nations Conference on Trade and Development) that produce the World Investment Report (WIR) argues that $765 billion FDI flowed ...