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June 19, 2008
Thursday
 
 
Reasons to love the Irish, ctd
Johnathan Pearce (London)  European Union • Globalization/economics

The Irish "no" vote on the EU's Lisbon Treaty has already had some positive effects, such as the lessening chances of the European major states attempting to create a tax cartel. Well, we can all hope, anyway:

France has dropped plans to push forward with tax harmonisation under its European Union presidency, following Ireland’s rejection of the Lisbon treaty.
Christine Lagarde, French finance minister, told the Financial Times that while the proposal for a common consolidated corporate tax base had not been abandoned altogether, Paris would no longer press other governments to back it over the next six months.

Yes, perhaps the French, rather than attempting to prevent some horrific "race to the bottom" on tax rates, should instead admit that tax competition, including that which comes from those dreadful offshore centres, is a good thing.

The comments ought to underscore just how serious are the consequences of creating an EU state and the benefits that exist from resisting that ambition.

Well, maybe I write these words in a spirit of optimism as the light pours through my window. Indulge me for a while.

Comments

St Paddy's and Finnegan's isn't good enough reason you gotta dig up some more?

Geez.

;)


Posted by Gregory at June 19, 2008 10:55 AM

Exit polls show that only 5% of no voters voted no primarily out of fear that the Irish corp. tax rate would come under threat. I found this to be a worryingly low percentile and it bodes ill for the coming re-vote. Most people still believe that it was the EU who saved Ireland from the economic doldrums of the 80's and not the attractive corp. tax rates.


Posted by WalterBoswell at June 19, 2008 11:08 AM

I think you'll find that the French are more likely to institute a race to the top on tax rates...


Posted by Andrew Duffin at June 19, 2008 12:06 PM

Andrew,

You are right of course, but I think the UK has done very well to emulate them in the last 11 years.


Posted by Monoi at June 19, 2008 02:38 PM

They've delayed it for six months. Big deal. It'll be sneaked in on the quiet when the fuss has died down. No stage in the unification of Europe is ever "dropped", only delayed. For decades, if necessary.


Posted by Sam Duncan at June 19, 2008 02:58 PM

Actually, the truth is that European socialists saw the treaty as a capitalist tool, and the liberals saw it as a socialist tool. I wrote about this weird paradox on my blog a couple of days ago.


Posted by Rationalitate at June 19, 2008 07:04 PM

Sam, I think not. A new referendum will be announced for 6 months or so. Guarantees will be given on matters such as corp. tax, abortion, neutrality, loss of EU commissioner (a compromise will be sought here) and other issues that registered high on in the No camps anxiety list.

It's important to remember that as much as 30% of those who voted no did so because they did not understand the treaty. The same figure in fact voted yes for more of less the same reason.

These guarantees will be waved about almost 24/7 by the Government, who will also mount an aggressive campaign to get the voters who would have voted yes but never showed up to vote on the day.

The combination of both the above actions will swing the vote by 6 or 7 percent towards yes.

I really hope I am wrong. I also hope that people start to ask themselves why we need to get so bloody integrated politically and socially into the EU spider web.

The other day I heard an announcement on the news the 90% of Irish towns now reach an acceptable level of EU tidiness. How did we get to this, that in the space of 40 years an agreement for the trading of coal and steel to giving a toss about what the EU deem to be a tidy town?


Posted by WalterBoswell at June 19, 2008 07:10 PM

Actually, the truth is that European socialists saw the treaty as a capitalist tool, and the liberals saw it as a socialist tool. I wrote about this weird paradox on my blog a couple of days ago.

The day after the posters went up I thought the very same thing. One day I found myself staring into the face of Joe Higgins as he sat across a black and yellow poster that warned me of the evil EU capitalists intent to privatise schools and hospitals.


Posted by WalterBoswell at June 19, 2008 07:52 PM

WalterB: Yes, that's how the Lisbon treaty will probably be implemented, similarly to Nice (although it would be rather amusing if they still voted No). But regardless of that, the point is that tax harmonization will happen, Lisbon or no Lisbon, Irish yay or nay.

Ireland will be given a derogation on corporation tax, then once the Irish public is less concerned with the issue it'll be quietly abandoned in exchange for some other favour.

Look at Britain's derogation from the Social Chapter of Maastricht. Hailed at the time as a great victory (and popular with the public) it was simply thrown away by Blair five years later, leading to a certain amount of impotent rage by people who understood what it would mean, but general indifference from the public at large.

Of course, as the competences of the Union become ever greater, the few remaining differences between the states become ever more dear to their people, and the harder it becomes to harmonize them. People care. I find it very hard to see a time when the Irish will look the other way when their military neutrality is threatened, for example.


Posted by Sam Duncan at June 20, 2008 03:09 PM
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