Wednesday 23 May 2018

Taxing questions to be asked of Ireland in post-Brexit EU

The Taoiseach is doing the work on Brexit but reform of the eurozone and corporate tax will be tricky, writes Colm McCarthy

Time for vision: Leo Varadkar addresses MEPs at the European Parliament in Strasbourg last week. Photo: AP
Time for vision: Leo Varadkar addresses MEPs at the European Parliament in Strasbourg last week. Photo: AP
Colm McCarthy

Colm McCarthy

Leo Varadkar's speech last Wednesday at the European Parliament gave brief mention to two issues, aside from the Northern Ireland border, which are big risks in Ireland's relations with the post-Brexit European Union. These are the reform of the eurozone and harmonisation of corporate tax.

A bad outcome on either would be hugely damaging. Both may soon come to be addressed through a process of treaty change initiated by France and Germany, supported by the European Commission and seen as politically less challenging after Brexit.

All of the emergency responses to the eurozone banking and sovereign debt crises were undertaken without altering the basic EU treaties. Treaty change is a lengthy and difficult process, requiring individual ratification by each member state. Some countries can ratify by parliamentary assent but many must go to referendum. Referendums can be lost, and not just in Ireland. The draft EU constitution was withdrawn, eventually to be replaced by the Lisbon Treaty, after 2005 referendum defeats in France and the Netherlands. European politicians have been wary of treaty revisions ever since.

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