Monday, May 21, 2007

Germany attacks Ireland

No, not really, but that was the first half of the headline of an article in Saturday's Irish Examiner. The full headline was "Germany attacks Ireland’s low corporation tax".

So, no U-boats in Dublin port or Stukas overhead, but still an attempt by the German government to kill the Celtic Tiger once and for all. This boggles me each time it's raised by one of the big "Old Europe" countries.

They haven't got the authority to impose harmonized tax rates throughout the EU, but they keep firing away at Ireland and others who have the audacity to cut corporate tax rates. They seem to believe that bullying the Irish and other small economies is the answer rather than simply adopting similar policies if, as they clearly believe, they're so effective.

This is a veto issue for Ireland. I'm not 100% certain of this, but I'm pretty sure I heard Joan Burton state on Newstalk over the weekend that Labour would support the use of the veto to prevent any moves to force tax harmonization by the big countries. That means there's no chance a change in government would soften the Irish government's position on this issue.