What are these people paying for and why?

Strange things happen “in threes” goes the expression, and this week’s batch of news has delivered at least three stories about how your money can be wasted by politicians and bankers!

Governments and banks seem to be like children who are unable to fathom out rather simple things for themselves. It is dreadful that they have to employ expensive consultants or waste taxpayers’ money to achieve doubtful or downright stupid objectives.

The first is the news the France’s President Macron has managed to secure a “coup for France” at Brexit London’s expense by getting Black Rock and Citigroup, and other Wall Street firms to expand their European businesses from Paris. He appears to have promised tax cuts and lighter regulation. Can somebody explain why these hugely profitable banks need to be supported by the French taxpayers? These big companies do little to support the real economy, and the tax benefits the companies receive reduce most of the tax income that new foreign workers pay. Macron would be better off supporting his own entrepreneurs, rather rather than attracting rent-seekers with lavish dinners in his castle. It is no wonder that his popularity is waning fast.

The second “exciting” news is that the EU has been spending 10’s of million of Euro’s on lavish contracts on the Big Four accounting firms for advice on taxation! I can understand that Junker is used to doing this. When he was Prime Minister of the Luxembourg Super-Power, he welcomed big companies to Luxembourg with near to zero tax rates. It appeared that PwC and the other 3 accounting firms were all invited to rake in as much business as possible to his super-state, an activity which distorted business arrangements and led top many countries inside the EU to forgo billions in corporate tax receipts. Now it appears that he is doing something again to keep his accounting friends in the lap of luxury. It is almost impossible to understand why the EU should be asking accounting firms for advise on matters relating to taxation, when all of the 28 members set their own tax regimes. This is apparently an incredible waste of money for EU’s taxpayers…

The third story is about one of Europe’s biggest banks, one which has managed to mismanage itself for the last decade in a spectacular manner. Back in 2007 its share price hit €152 and now today’s price is around €9.7! The latest news has been that a private equity company called Ceberus has been appointed as an adviser on restructuring the bank’s operations. What is unusual and damming is that Cerebus is also a big investor in the bank. This is not illegal, but such work gives plenty of inside and confidential information to Cerebus. Naturally, the private equity group claims that they have strong Chinese walls between its investment and advisory business… yes, this is what the Big Four accounting firms also say…. And you can believe what you like! However, one must wonder why the bank has a management board and a very highly paid CEO! Little wonder that the share price is so low…

The above photo is of the “Three Witches”by the Swiss painter Henry Fuseli, 1741-1825

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