Brussels has bias towards big EU states says Noonan
Outgoing Finance Minister Michael Noonan has fired a parting shot at the European Commission, claiming that the Brussels body promotes the interests of larger countries and no longer stands by small states.
Mr Noonan, who is due to step down once his successor is appointed by the new Taoiseach, said it was once the case that the Commission was the bulwark for the interests of small countries to ensure they weren't overwhelmed by the larger economies of France, Germany and Spain among others.
Standing next to a senior European Commission official at an event in Dublin yesterday, Mr Noonan, inset, said that is now no longer true.
"The Commission doesn't stand by smaller countries any more. As far as I can see now… the Commission promotes the interests of the larger countries," Mr Noonan said.
He said this was particularly the case in the plans for a common consolidated corporate tax base.
The Government opposes the plans, which include making companies pay tax in countries where sales are made rather than where businesses are controlled.
In Ireland's case it would undermine the competitiveness of the 12.5pc corporate tax rate that has helped make the country a favourite European base for US multinationals.
"The Commission, through Commissioner [Pierre] Moscovici, is pushing this quite strongly," Mr Noonan said.
The minister told the conference organised by the Institute of International and European Affairs about the prospect for closer fiscal union within the Eurozone, the mutualisation of debt, and the establishment of a Eurozone finance minister.
"I'd be reluctant to rush into new arrangements on fiscal union, with a European finance minister, unless we have assurances that the Commission will revert to its previous practice, if not mandate, of standing by smaller countries, of protecting their interests," Mr Noonan added.
He was speaking alongside Michel Servoz, the Director General of DG Employment, Social Affairs and Inclusion at the European Commission.
Mr Servoz didn't address the criticisms made by Mr Noonan.
He did, however, take issue with the 9pc VAT rate for tourism. The Commission has said that the Government must limit the scope and number of tax expenditires, and broaden the tax base.
"I understand there is a special VAT rate of 9pc for tourism. I think it was … to create more jobs in this sector," Mr Servoz said.
"Do we have evidence of the number of jobs that have been created? Do we have evidence that indeed all the private companies involved in tourism have reduced the [amount] they are charging to tourists as a result of this reduction in the VAT rate?
"If not, perhaps it's the moment to reconsider it. Because I think it's an important increase in revenue. This is the way to increase the tax base."
Meanwhile, latest Exchequer Returns show that the tax take for the year so far was 1.4pc, or €268m. Income tax and corporation tax continued below target, down €202m and €185m respectively, while VAT was €254m ahead of target.