Wednesday 23 May 2018

Tarnished State needs to take the fight to Europe

Stock photo: AFP/Getty Images
Stock photo: AFP/Getty Images

Ed Brophy

Most of tidal wave of opinion since the European Commission's decision on Apple landed is wrong.

The Commission's decision looks back to the past, to a world that is gone. What the commentators have missed is that Ireland has long seen the writing on the wall and has already put in place a new economic strategy for this new world that looks more to Boston than to Brussels or Berlin.

Tax schemes like the notorious Double Irish that did us such reputational damage in the past were decisively shut down by the last government, and Ireland is strongly committed to clamping down on aggressive tax avoidance strategies that artificially shift profits to low or no-tax locations through the OECD's so-called BEPS process. In place of using tax as our USP for attracting inward investment, the last government and the current one fundamentally changed Ireland's offering to one that emphasises our highly skilled labour force, excellent quality of life, ease of doing business and location - post-Brexit - as the only English-speaking gateway to the largest market in the world.

Of course tax is still part of the mix, but it is now one of many factors. And Boston is buying it - as evidenced by the ever-increasing levels of foreign-direct investment into Ireland by US companies.

However, the unprecedented attack on our reputation and sovereignty by the Commission has done plenty of damage and it is critical that the Government pushes back more strongly than it has done to date.

The Government's fightback should be three-pronged: firstly it needs to highlight to the public and investors that the economic strategy the Commission's decision implicates has long ago been consigned to the dustbin of history. Secondly, it needs to draw a line under this by reassuring the public that our corporate tax rate of 12.5pc means just that - no more, but equally no less.

Finally, it needs to build alliances with other nations and stakeholders that take issue with the Commission's overreach into matters that are properly the domain of national governments - both by appealing the decision and questioning the very assumptions that underpin it.

The Commission has a long history of using EU law to extend its writ far beyond what was originally intended by Member States. The Apple case is the thin end of the wedge.

However post-Brexit, there is no support among European citizens or their governments for what advocates of greater integration like to call 'More Europe'. What we would like to see instead is a 'Better Europe' that improved the living standards of its citizens, equipped them with the skills needed for the 21st century economy and didn't stand in the way of investing in badly-needed infrastructure. Think of it as a kind of 'Boston with Benefits'.

As the Member State that most closely reflects this vision, Ireland is best-placed to use the Apple decision as a platform to make the case for it at EU level.

Ed Brophy is practice leader at Accreate Executive Search. He was previously chief of staff to Tánaiste Joan Burton

Irish Independent

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