Every week at the Current we round up the biggest business stories from around the globe. This week: Greek negotiations, EU tax reform, the European Court of Justice strengthens the ECB, Russia cuts rates, scammers target Canadians, cottages in demand, and it’s a Jurassic World.
Eurozone finance ministers have rejected a proposal by Greek negotiators to extend the current bailout deal. Greek officials claim they had requested a continuation of days or weeks while eurozone officials contend that the proposed extension period was closer to a month. Greece owes the IMF €1.6 billion on June 30th. The once implausible prospect of a Grexit has become a very real, and very troubling possibility, the consequences of which could be disastrous for Greece, the euro and the European Union.
According to the CBC, scammers claiming to be from the Canada Revenue Agency have been calling and texting Canadians and demanding payment for fictitious tax bills. The fraudsters have used a similar scheme in the past and have used emails and even text messages along with phone calls to try to dupe unsuspecting victims. Canadians should stay vigilant and remember not to disclose personal or financial information over the phone.
EU Tax Reform
The European Commission (the European Union’s executive body) has announced a plan to reduce corporate tax avoidance. The scheme will not result in a common tax code but will dictate a uniform set of rules for global businesses to determine the amount of taxable earnings originating within the EU. Despite the existential crisis posed by the risk of Greek debt default, the move should help businesses navigate the EU’s complex, overlapping laws and regulations.
ECJ backs ECB
The European Court of Justice (the legal wing of the EU, similar to the Supreme Court) has upheld the European Central Bank’s ability to buy sovereign bonds. The ruling solidifies the much debated role and rights of the ECB which has less power than, for example, the Federal Reserve or Bank of England. Opponents contend that the ruling will allow the ECB to effectively overstep its monetary-policy-focussed mandate and prop up weak economies. Supporters argue that increasing the role and tools of the ECB is crucial to the eurozone’s survival. With just days to go until Greece’s future is decided, the newly buttressed powers of the ECB may have to be put into overdrive.
Russia Cuts Rates
Russia’s central bank has cut its interest rate for a fourth time this year to 11.5%. Inflation has battered the Russian economy as a result of sanctions imposed by Western countries in retaliation to Russian meddling in Ukraine, and by the fall in oil prices last year. The interest rate cut is a positive sign for the Russian economy.
Uber, a California court recently ruled, must treat drivers as employees and not as contractors or freelancers. It is not the first legal challenge levied against Uber but it could fundamentally alter the company’s business model if the ruling is upheld. Protests and other legal challenges have kept Uber in the news but the innovative app has proven to be resilient thus far.
Jurassic World starring Chris Pratt has smashed box-office records around the world, earning over $500 million globally on its opening weekend.
The weak performance of the loonie relative to other major currencies is attracting some investors. The retail property market, which includes cottages, is heating up and prices could start rising. In addition to foreign buyers many Canadians are maximising foreign investments by bringing their money back into Canada while the loonie is low and reinvesting in property.
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