Ireland Needs to Consider Leaving EU

Irexit is becoming more of a mainstream idea in Ireland. UK think-tank Policy Exchange has this morning published a paper by Ray Bassett, an experienced Irish diplomat who retired as an ambassador last year. The Irish Diplomatic Service has for decades been in awe of and subservient to the EU. Now the reality of Brexit is making even some diplomats question this fundamental tenet of Irish foreign policy in the face of increased hostility from the European Commission. The financial crisis of 2008 confirmed that a small country on the Western periphery of Europe will never be a priority of the European Central Bank. Membership of the Eurozone has cost Ireland dearly for little benefit, most of Ireland’s external trade is in sterling and dollars…

Bassett warns that whatever the outcome of the Brexit negotiations, “there will be a price to pay. For Ireland, there is really no upside to Brexit,” he says. “The question to be raised is what price is Ireland willing to pay to stand in solidarity with the remaining 26 EU countries?”

The paper argues sitting on the sidelines and allowing the EU to negotiate for Ireland is untenable. The first duty of the EU negotiators is to act on behalf of the EU as an institution. This is prioritised in their European Council approved guidelines. However the type of deal that Ireland’s interests requires, including free trade with the UK, is directly in contradiction with the EU negotiators’ mandate that anything relating to Ireland and her border which emerges from the Brexit negotiations must “maintain the integrity the Union’s Legal Order” – with no exceptions to the customs union. Bassett argues therefore that Ireland must give serious consideration to Irexit.

Irish politicians are by nature transactional, for decades Ireland was a net beneficiary of EU largesse, she is now a new contributor, a situation which will worsen after Brexit takes billions out of the EU budget. It’s like the Eurovision Song Contest – Ireland used to be a regular winner, now Eastern Europe has joined, they rarely win.

The Irish political establishment is extremely wary of Irexit and will want to see signs that Britain has first made a success of Brexit. Once the UK concludes a free-trade deal with the US the pressure on Ireland – which would be geographically in the middle of a North Atlantic Free Trade Area yet not a member – will become immense. The illogical situation of being in a currency and trading bloc when most of your trade is not in the bloc or the currency will make Irexit inevitable… 

Ireland Asserts Tax Sovereignty in European Commission Legal Battle

Ireland’s Finance Ministry is not holding back in the battle with the European Commission. In a legal briefing over the Apple Tax case the Irish government argues that:

  • The Commission has misunderstood the relevant facts and Irish law
  • The Commission has misapplied State Aid law
  • The Commission wrongly invokes novel legal rules
  • The Commission has exceeded its powers and interfered with national tax sovereignty

There is no doubt that the Commission is trying to use State Aid laws to thwart Ireland’s competitive tax regime over which the EU has no competence. Ironically if Ireland loses it gets a windfall of €13 billion in taxes (about €2,600 per person). That is enough to wipe out the budget deficit for a couple of years…

Nevertheless it is a fight that Ireland wants to win. Post-Brexit Ireland wants to be seen as corporate America’s best friend in the EU. Ireland is looking to a high-tech future across the Atlantic…

EU Ruling Against Ireland Will Boost Chances of Irexit

IREXIT-PROSPECTS

The European Commission is expected to levy a judgment against Apple soon that could total in the billions of euros. This is as a result of Apple domiciling in Ireland and benefiting from its competitive tax regime. Essentially the Commission is seeking to undermine Ireland’s low tax policy which attracts multi-nationals to the Western periphery of Europe. As one minister told the Irish Times: “They are trying to make us tax Apple for stuff that doesn’t happen here. It’s nonsense.” They come for the tax regime and find a young, highly-educated workforce with a can-do attitude….

“We don’t believe we gave any state aid to Apple,” Eoghan Murphy, junior finance minister, told broadcaster RTE, “It’s in the national interest that we defend our international reputation in this regard.” Precisely. The bloated high tax states are going to attempt to hobble low tax Ireland with the handicaps that they have given to enterprises in their own countries. Most mainstream politicians of all parties are committed to Ireland being, in the words of the Taoiseach Enda Kenny, “the best little place to do business in the world”. The Commission is undermining that competitive advantage. The right-of-centre pro-business parties are going to fight this ruling, the left-of-centre parties were angry earlier this summer because the Commission overruled the Dáil (parliament) on water charges – forcing the state to charge for water supply which was hitherto delivered free to homes. EU law having primacy over laws made by Ireland’s lawmakers.  is looking more appealing to all sides…

Ireland’s contribution to the EU is rising by €380 million this year because its GDP is surging as the economy rebounds. Ireland is a net contributor to the EU budget after decades of being a net beneficiary. Ireland’s EU burden share will increase post-Brexit as the EU loses the second biggest net-contributor. This will change the debate, particularly as Dublin watches Ireland’s biggest trading partner Britain continue to thrive outside the EU…

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Peter Mandelson tells Emma Barnett…

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