Thursday 19 July 2018

'Our views on tax are different - and will come to a head soon' - German ambassador

German ambassador Deike Potzel in St Stephen’s Green, Dublin. Photo: Damien Eagers
German ambassador Deike Potzel in St Stephen’s Green, Dublin. Photo: Damien Eagers

Shona Murray

The German ambassador to Ireland has warned the two nations' differing stances regarding tax harmonisation will inevitably come to a head this year.

It is a recurring bone of contention among the bigger EU member states and smaller ones like Ireland whose selling point for foreign direct investment is led by attractive tax relief.

"Tax absolutely is an issue," newly appointed German ambassador Deike Potzel told the Irish Independent.

"We cannot have major tech giants profiting from infrastructure and sales from European taxpayers and routing their tax in Ireland.

"We are very much in favour of tax harmonisation, as is the German public," she said.

With the Irish Government willing to move on tax but through the OECD system as opposed to through the EU, Ms Potze said: "We know that they [the Irish Government] have a completely different take than we do, but that is something that the EU 27 will debate in Brussels.

"France and Germany are basically on the same page on this issue and it's something that just needs to be figured out.

"It'll probably be a few more encounters before the issue is resolved, but there is no doubt that it will come to a head this year."

During her tenure, the new ambassador is determined to dispel some of the stereotypes Irish people have about Germans.

People "always have the idea that we are very stern, punctual and disciplined and, really, yes we are but there's also a different side to us - we can be really funny", she said.

Part of her mission is to inform Irish people about Germany and move away from the criticism that's been levelled at the German government over EU-wide austerity measures in recent years.

German Chancellor Angela Merkel and former finance minister Wolfgang Shäuble have been regular targets of frustration by Irish voters over the rigid and penurious bailout Ireland agreed to back in 2010.

If Ireland was the poster boy for austerity, Mr Schäuble was the poster boy for fiscal rectitude.

"A lot of people said 'yes, one should have handled certain things differently' and that's good as we learn from these cases but I think it's really, really important to reflect on what was the situation back then," said Ms Potzel.

German taxpayers had funded much of the bailouts given to countries like Ireland, Greece and Portugal.

The population in Germany needed to be assured the money had strict constitutionality applied to it.

Moreover, German citizens had gone through the same pain in the 1990s, albeit self-imposed, she said.

A particularly gloomy economic outlook and sluggish GDP led Germany to be characterised as the "sick man of the euro area".

Years of intense belt-tightening were introduced to transform its economy into the European motor it is now.

"We took really hard measures to get out of that situation and you also have to see what is explainable to our public," she told the Irish Independent.

Peace

"We are not the only ones to make the decisions - that is a really important point."

Sometimes people tend to forget there are 27 others at the table creating EU policy, she added.

Ms Potzel grew up in East Germany - a harsh and limiting environment which partly motivates her unwavering commitment to the European project as a guarantor of peace among its nations.

"We tend to forget that the EU is a peace project - that sounds naïve, but it is," she said.

"Look at the Good Friday Agreement - an essential part of it working was because both [nations] were in the EU."

When the Berlin Wall fell in 1989, one of the first places she visited was Ireland.

"Suddenly, the world was open to us and there were suddenly so many opportunities that we didn't have," she recalled.

"I saw the wonderful chances ahead and I tried to grasp them; me and my now husband took a trip around Europe. We ended up spending five days in Spiddal in Galway because we liked it so much."

She proudly stands beside a water feature - gifted by former German president Roman Herzog to Ireland - on the east side of St Stephen's Green.

It was in gratitude for "help given to German children by the Irish people after World War II".

And she added: "I chose to come here also because I want to be of help during Brexit."

Irish Independent

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