Apple escrow fund lost €259m in 2022
The fund decreased in value on the back of 'movements in the global market for fixed income securities'. Picture: Larry Cummins
Ireland’s Apple escrow fund lost €259m in value in 2022, with the head of the Department of Finance admitting on Thursday it would be “some time” before the State knows what the final outcome of the infamous case will be.
Earlier this month, the Court of Justice of the European Union (CJEU) issued an opinion disagreeing with a previous European judgment indicating Ireland will have to take possession of roughly €13bn in unpaid corporate taxes from the tech giant, which holds its European headquarters in Cork.
It emerged at Thursday morning’s meeting of the Public Accounts Committee and the Department of Finance that the fund — which has been sitting on deposit for the past five years pending the outcome of Ireland’s legal challenge to Apple’s initial fine — which initially totalled €14.3bn, decreased in value in 2022 by €259m on the back of “movements in the global market for fixed income securities”.
The European Commission had initially ruled Apple should pay Ireland €13bn in back taxes plus interest in 2016 following a two-year investigation — a ruling which Ireland subsequently appealed.
Speaking at PAC, Department of Finance secretary-general John Hogan, asked by Social Democrat Catherine Murphy whether his department was “preparing for eventualities” in terms of what will happen to the money, replied that he was “constrained” from speaking openly on the matter.
“We have the advocate general’s opinion. It will be some time yet before we know what the final outcome will be,” Mr Hogan said.
He said, meanwhile, that falling inflation in the eurozone does not necessarily mean immediate good news for Irish citizens, as “the cumulative effects of the increase in rates has likely not been fully felt yet, either in Ireland or globally”.
“In fact, data suggest that growth in Europe has slowed and — while the overall level of employment is still very high — the most recent Irish data suggests a softening in labour market conditions,” Mr Hogan added.
Separately, the department’s head of shareholding Des Carville, a former financier with Davy, said the country was now “at the end at this stage” of a programme of the sale of non-performing loans from the three pillar banks to other financial entities and vulture funds.
While the process has served to strengthen Irish banks’ balance sheets, it has left some borrowers with struggling loans faced with rates almost double what other Irish mortgage holders are paying, as vulture funds here have increased the rates on those mortgages in tandem with the 10 straight hikes in the European Central Bank’s base rate seen since the summer of 2022.
Mr Carville said, however, that when a mortgage changes hands between servicers, “the contractual terms of a loan don’t change”.
Mr Hogan, meanwhile, said the topic is “outside the ambit of questioning” that the department would ordinarily be expected to face, adding he was “not aware” of the department seeking powers to cap interest rates on loans.
Speaking on the initial €64bn paid out in 2008 to bail out Ireland’s banks following the global financial crash, Mr Carville said “€35bn of that is gone, that’s Irish Nationwide and IBRC [formerly Anglo Irish Bank]”, and the State may end up recouping just €1bn of that figure.
He said the State “didn’t have any choice” when it came to paying out the €64bn figure, with the entire banking system on the verge of collapse in September 2008.
