Tánaiste criticises European Commission moves on corporate tax base

The Tánaiste, Minister for Justice, Equality and Law Reform and Progressive Democrats leader, Michael McDowell TD, has told the National Forum On Europe that he “radically disagrees” with moves by the President of the European Commission to harmonise the corporate tax base – the elements on which the tax is levied in Members States, not the tax rate itself. “We don’t need Mr Barroso to tell Irish companies how to fill in their tax forms”, he said, responding to a query from Progressive Democrat Forum Member, Sirena Campbell. He added that Ireland was one of the easiest countries in the world in which to pay tax. “A European system would not be better or easier than the Irish way”.

The Tánaiste was outlining his party’s vision for Europe at a Forum plenary session in the Westin Hotel in Dublin (14 December 2006), one of a series by party leaders to the Forum. In his address, he said that his party supported a “bottom-up, problem-solving, practical model” rather than a “Federalist, top-down, prescriptive, solutions looking for problems model for future development of the Union. ”

Mr McDowell also warned Member States against giving the European Union powers to create Union-wide criminal law in the fight against cross-border crime. He was responding to current moves within the European Union to lift national vetoes on justice issues.

“It is my very strongly held view that criminal and constitutional law are inextricably interdependent”, he told Forum members from across the political spectrum.  “A Union approach to criminal matters would require the creation of a Union federal constitution with powers and institutions analogous to those of the United States of America, if the Union competence in criminal law were to be realised.”

The Tánaiste said that he had no problem with an integrated approach to visas, migration, residency, asylum seeking, and refugee issues. He acknowledged that there was “a crying need” for effective cooperation in the battle against certain crimes. “ In the Europe of today and tomorrow there is no doubt that the battle against criminality in the fields of financial fraud, drug dealing,cyber crime, people trafficking,  and racism can no longer be left to individual member states to fight on an uncoordinated basis”. Nonetheless, he believed that Member States should retain power in the area of criminal law and should counter the international dimension of crime by enhanced police and judicial cooperation rather than by trying to harmonise criminal law systems which vary from Member State to Member State.

In the debate with Forum members which followed, former Justice Minister Nora Owen of Fine Gael said that the Tánaiste was one of the “dominant voices” among European Union Justice Ministers in favour of retaining Member States’ national veto in implementing justice measures.  However, she believed that we must recognise the need to lose the veto to prevent cross-border criminals from “peddling their crimes and viciousness”.  “There are times when you should remove your very expert hat as a criminal lawyer and court officer and think about how some project might protect the citizen better”, she told the Minister who is a former Attorney General.

The Tánaiste also defended the government’s decision to impose restrictions on the movement of workers from Bulgaria and Romania which are due to join the European Union next month.  Replying to criticism from Sinn Féin Counciller Diathí Doolan, Mr McDowell argued that to operate an open door policy would “destabilise the labour market here and lead to blue collar racism”.

The Minister claimed that Cllr Doolan would change his tune in the forthcoming general election campaign. “When you and I are prowling around the doorsteps of Ringsend or wherever, you won’t be talking then about opening the labour markets to Bulgaria and Romania”, alleged the Tánaiste.

Senator Ann Ormonde of Fianna Fáil strongly supported the concept of subsidiarity, which ensures the Union does not take action that would be more effectively taken at regional or local level. She did, however, make the case for accelerating cooperation between Member States on combating cross border crime, citing drug and human trafficking as particular concerns to citizens. She also believed that a better way had to be found in tracing criminals crossing borders between Member States.

Several Forum members took issue with the Tánaiste when he criticised those countries which sought to “cling onto” the European Social Model, with its emphasis on state-funded social protections. “It is to cling to something which cannot be sustained even by wealthy EU members in relative decline, and certainly cannot be sustained by the less well-off EU members whose goal it is to catch up”, Mr McDowell said. “I do not believe that we can regard the European Social Model as one for Ireland to follow.”  Neither, though, did he believe that the American model is one this country should choose – in a reference to his predecessor Mary Harney’s remark that Irish interests were closer to Boston than Berlin.

The Labour Party’s Europe spokesman, Joe Costello, saw the European Social Model as a necessary balancing factor in a Union in which economic integration was high on the agenda. The Irish Congress of Trade Unions representative at the Forum, Blair Horan, was concerned that the Charter of Fundamental Rights, which he saw as underpinning the European Social Model, might be jettisoned in any new version of the Constitution for Europe. He claimed that the European Social Model was about the values that underpin European integration.

Cllr Deirdre de Búrca of the Green Party, claimed that after nine years of the Progressive Democrats being in government Ireland was closer to Boston than Berlin. She believed that the US model was one of “private wealth and public squalor” which did not appeal to most European Union citizens. She said that most Europeans preferred a more equitable system where much of the wealth generated should go on high-quality public services.

Padraig Mannion of the Workers Party believed there was a contradiction in the Progressive Democrat leader’s call for a bottom-up, rather than a top-down, approach to decision-making in Europe. “The PDs have supported all the referenda which have handed more and more powers to the European Commission,” he argued.

Mary Freehill of the Association of Irish Regions lamented the lack of real local accountability, calling Ireland the most centralised state in Europe.

Independent Senator Fergal Quinn agreed with Mr McDowell’s view that the Union had to deliver tangible benefits for citizens such as more jobs. He cited Enterprise and Industry Commissioner Gunther Verheugen’s recent comments that over-regulation is costing Union industry  €600 billion per year. The Tánaiste suggested that any new measures being proposed by the European Commission should be subject to scrutiny by an independent body to ensure their impact is positive.