These are stories Report on Business is following Wednesday, April 22, 2015.
Imagine a teeny tiny country where politicians are rare and taxes optional.
No army, no extremists.
And, as I interpret its motto, and thus its raison d'etre, freedom to do a lot of things you want to do, as long as you respect others, because politicians "could not interfere too much" in the self-proclaimed Free Republic of Liberland.
What started out as something more like a political caper – "a little bit like a protest," the self-proclaimed president told Time – is now generating a lot of buzz.
Already, says would-be leader Vít Jedlička, tens of thousands of people have applied for citizenship in the supposed state, which is sandwiched between Croatia and Serbia. It measures about seven square kilometres along the Danube and, it says, was no-man's land under international conventions.
There are no plans to tax the rich like, say, in Alberta and Ontario. Actually, there are no plans to tax anyone, unless they want to pay.
"The key idea is voluntary taxes, creating a state so small that there's almost no state," Mr. Jedlička told Agence France Presse.
"Liberland came into existence due to a border dispute between Croatia and Serbia," its website says.
"This area along the west bank of the Danube river is not claimed by Croatia, Serbia or any other country. It was therefore terra nullius, a no man's land, until Vít Jedlička seized the opportunity and on 13 April 2015 formed a new state in this territory – Liberland. The boundary was defined so as not to interfere with the territory of Croatia or Serbia."
As Liberland boasts, it's now "the third-smallest sovereign state, after the Vatican and Monaco."
It has a flag, a coat of arms, and a motto of "to live and let live." It describes its government as a "constitutional republic with elements of direct democracy."
Its official languages are Czech and English, which you'd need, of course, if you want to be a tax haven.
"The objective of the founders of the new state is to build a country where honest people can prosper without being oppressed by governments making their lives unpleasant through the burden of unnecessary restrictions and taxes," it says.
"One of the reasons for founding Liberland is the ever expanding influence of interest groups on the functioning of existing states and the consequent worsening of living conditions of people. The founders are inspired by countries such as Monaco, Liechtenstein or Hong Kong."
Mr. Jedlička, 31, is a member of the Czech Republic's Free Citizens Party.
He has been grabbing headlines around the world and, Liberland says, has met with several global leaders, among them Austria's ambassador to the Czech Republic and the chief of the OECD's Economic and Development Review committee.
For the record, Liberland says it needs citizens who respect people and their opinions, regardless of race, ethnicity or religion.
Or "orientation," which one could argue makes Liberland much more palatable than Indiana or Arkansas.
One "untouchable" rule is respect for private ownership.
Oh, and you can't be a Nazi, Communist or extremist, and can't have a criminal past.
(I assume what all this also means, for example, is that you don't have to wear clothes if you don't want to, but neither could you peek over the fence to ogle your naked neighbour. But that's not for sure since the English versions of its laws and Constitutions are "coming soon," as the new state's website puts it.)
- The Liberland website
- In Ontario, it's taxing the rich. In Alberta, it's helping out
- Basic human rights win the day, but a stain on Indiana and Arkansas
'Sound the trumpets'
Here's what some observers have to say about the federal budget:
"Sound the trumpets and let the ticker tape fly … All told, federal fiscal stimulus looks to amount to roughly 0.5 per cent of GDP in 2015-16, more than offsetting planned/prospective provincial belt-tightening and providing an important impetus to growth for an economy that has been dragged down by lower oil prices. With fiscal stimulus providing such a lift, there's less call for additional monetary easing by the Bank of Canada." Warren Lovely, National Bank Financial
"The federal government has done it. They have met their promised target of reaching budgetary balance in 2015. This is despite being hit with a sharp, downward revision to revenues resulting from the collapse in oil prices since mid-2014. Cobbling together revenue from various sources, combined with a modernization of the public service disability and sick leave management system, the government managed to deliver some moderate new spending measures and tax relief while positioning itself to meet its long-term debt target too." Derek Burleton, Randall Bartlett, Diarra Sourang, Toronto-Dominion Bank
"There is precious little for stocks in this document. Ottawa did take some steps to support junior miners and continues to support the creation of an LNG industry, but these steps will have little impact on equity market performance. The broader fate of oil prices and the global economy are much more crucial – budget measures will have little say in these global trends." Robert Kavcic, Benjamin Reitzes, BMO Nesbitt Burns
"Although the Conservative-led government fulfilled its pledge to eliminate the federal budget deficit, fiscal restraint at this juncture seems unnecessary considering the negative fallout from the slump in oil prices. We expect economic growth to be much weaker than the government assumes, with fiscal restraint only slowing the economy down." David Madani, Capital Economics
"The Canadian federal budget presented on Tuesday, despite some lower tax and higher spending initiatives, still shows declining debt ratios over the medium term, although the decline is less than the government had projected earlier. Nonetheless, the rating agency says that this trend, together with Canada's overall economic and institutional strengths, is compatible with the country's AAA rating and stable outlook." Steven Hess, Anne Van Praagh, Moody's Investors Service
"Some might quibble that, given the uncertainties facing both the oil sector and its economic implications, the Finance Minister was imprudent in reducing contingencies, or counting one-time asset sale proceeds. We argued … that 'spending' some of the $3-billion contingency for 2015/16 that was there in the mid-year update projections is justified if one sees the oil shock as just the sort of contingency that it's designed to cover." Avery Shenfeld, Maria Berlettano, CIBC World Markets
- Bill Curry and Barrie McKenna: Conservatives deliver balanced budget ahead of election
- Rob Carrick: Seniors the runaway winners in pre-election budget
- Shawn McCarthy: In balanced budget, Tories target growth in manufacturing, small business
- David Parkinson in ROB Insight (for subscribers): Budget relies on consumers to keep their feet on the gas pedal
- Barrie McKenna: 'Inefficient' small-business tax break an incentive to stay small
- Bill Curry, Chris Hannay and Jeremy Agius: Seven charts that explain the budget
Earnings flood in
Corporate earnings are flooding in fast today.
"Despite a cold start for the economy, Q1 earnings have been rosier than expected with 73 per cent of firms topping analysts' estimates, but lagging revenues (only 43 per cent have beaten expectations) have weighed on sentiment as of late - perhaps a clearer reflection of some of the underlying softness in the economy," said Alex Koustas of BMO Nesbitt Burns.
Analyst Jasper Lawler of CMC Markets agreed that there's mounting concern over "a trend of revenue-misses," citing several companies.
- Tough competition, food scandals hit McDonald's sales, profit
- Coca-Cola profit tops estimates as price increases boost sales
- British retailer Tesco reports $9.5-billion loss as it writes down value of properties
- Metro profit rises on higher same-store sales
EU levels allegations
The European Union is going after Russia's Gazprom, a move certain to fan the flames amid the ongoing Ukraine turmoil.
The European Commission said today that it sent what's known as a statement of objections to the Russian gas giant alleging "that some of its business practices in central and eastern European gas markets constitute an abuse of its dominant market position in breach of EU antitrust rules."
Specifically, the EC said its "preliminary view" is that the government-controlled company chased "an overall strategy to partition central and eastern European gas markets," for example by limiting cross-border gas reselling.
"This may have enabled Gazprom to charge unfair prices in certain member states," the EC said in a statement, noting the company has 12 weeks to respond.
No allegations have been proven, and Gazprom said it finds the accusations to be "unsubstantiated."
"OAO 'Gazprom' strictly adheres to all the rules of international law and legislation in the countries where Gazprom Group operates," the Russian company said.
"Operation of Gazprom Group on the EU market, including applicable principles of gas pricing, meets the standards that are used by other producers and exporters of gas."
Streetwise (for subscribers)
- Jacquie McNish and Nicolas van Praet: Caisse wins rare job protections for Quebec in Cirque du Soleil deal
Inside the Market (for subscribers)
ROB Insight (for subscribers)