Here’s the paper I presented to the Old Dublin Society the other night. I had too many images to upload. Only a few are included here:
Corporate tax avoidance is a high salient political issue in Brussels.
This is largely a response to demands from citizens across the EU to ensure that large MNC’s, particularly from the US, pay their fair share of taxes when operating in the EU single market.
Ireland, as we all know, has been called out, and challenged on this issue.
The companies that the EU have in mind are large Silicon Valley firms, and finance firms operating in the shadow banking sector.
The Commission have recently called for the introduction of a common consolidated corporate tax base (CCTB), to be introduced over two stages. They are also keen to introduce a financial transaction tax (FTT).
These are directly aimed at tackling corporate tax avoidance.
Ireland has said it would veto any attempt to introduce either of these at the EU level. But it was Britain that was most vocal about it.
It’s therefore worth noting that Jean Claude Juncker stated in his state of the union address this morning that he is in favour of moving toward qualified majority voting (QMV) on decisions related to the CCCTB and the FTT.
A post-Brexit EU is going to be a very different terrain for Ireland.
QMV will be used more often. This empowers German and French interests in the European Council, and the numbers stack up to ensure they get what they want.
Is the writing on the wall for Ireland’s veto against the CCCTB?
The Economic and Social Review has just published its latest issue at (Vol 48, No 3, Autumn 2017)
Taxation, Debt and Relative Prices in the Long Run: The Irish Experience
Vahagn Galstyan, Adnan Velic
An Irish Welcome? Changing Irish Attitudes to Immigrants
and Immigration: The Role of Recession and Immigration
Frances McGinnity, Gillian Kingston
Does the Month of Birth Affect Educational and Health Outcomes? A Population-Based Analysis Using the Northern Ireland Longitudinal Study
Stefanie Doebler, Ian Shuttleworth, Myles Gould
Policy Section Articles
Modelling the Medium- to Long-Term Potential Macroeconomic Impact of Brexit on Ireland
Adele Bergin, Abian Garcia-Rodriguez, Edgar L. W. Morgenroth, Donal Smith
How Sensitive is Irish Income Tax Revenue to Underlying Economic Activity?
Yota Deli, Derek Lambert, Martina Lawless, Kieran McQuinn, Edgar L. W. Morgenroth
Valuing Informal Care in Ireland: Beyond the Traditional Production Boundary
Paul Hanly, Corina Sheerin
The Fiscal Council’s offering in advance of Budget 2018 can be read here.
For years now, Ireland and the UK have been the best of friends. Very sadly, Brexit is placing the relationship under strain. The positions of the two governments on the Irish border could not be further apart. Ireland is very clear: no trade deal that involves a physical border is acceptable. That obviously implies that the United Kingdom should seek to remain within the European Economic Area, and form a new customs union with the EU. This would replicate its existing trade ties with the bloc, while respecting the vote to leave the EU, and avoid the need for a border within Ireland. The United Kingdom, on its part, is adamant that it must leave the customs union in order to strike separate trade deals with the United States and other countries overseas. To be sure, it pays lip service to the importance of avoiding a border between Northern Ireland and the Republic, but this appears to be nothing more than a cynical manoeuvre. On the one hand, the magical unrealist tendency within the British government appears to think that by talking up the border issue, they can undermine the EU customs union, which has been defined by a common external tariff barrier since the 1950s. This would allow the UK to have its cake and eat it. On the other hand, the lip service will, they hope, allow the UK to place the blame for the consequences of its own decisions on Ireland and the rest of the EU.
What, if anything, can Ireland do? As has been noted recently, the country is not powerless. While the withdrawal agreement between the UK and EU will be decided by qualified majority vote, Ireland does have a potential veto in at least two possibly relevant circumstances. First, it would have a veto should the UK seek to extend the two-year deadline for exit following its Article 50 notification. Second, and probably more to the point, if as seems likely the UK ultimately seeks an ambitious, “mixed” trade deal with the EU that includes provisions on, for example, investment, Ireland will have a veto on that as well.
The UK therefore has the power to give Ireland something that we want: the maintenance of a border-free Ireland. There are encouraging signs that some in Britain may now be moving in that direction, but they are not currently the ones driving British policy. And down the line, Ireland will have the power to deny the UK something that it wants: a trade deal with the EU that goes beyond tariff-free trade in goods, and includes the kinds of provisions on portfolio investment that would be of interest to the City. The question therefore is: can Ireland credibly threaten to use this power in an attempt to prevent the reimposition of a border on our island? Continue reading “Could Ireland credibly threaten to veto an EU-UK trade deal?”
A quick update on the annual DEW Conference. As noted a couple of weeks ago, the conference takes place in White’s of Wexford on September 22nd and 23rd. The post linked above outlined some highlights (at least in my own opinion) based on the programme as it was at the time.
An updated programme is now live at this link [PDF]. There are two further updates to the programme that readers may be interested to know:
- Firstly, Minister for Finance Paschal Donohue will be giving the William Petty Keynote on Saturday evening, before the conference closes. He will speak after the Ireland in 2040 session, so it is likely he will address the regional spread of economic activity and the related topic of spending on infrastructure.
- Secondly, Stephen Donnelly TD will be giving the Cantillon Lecture on Friday afternoon. Stephen is the Fianna Fail spokesperson on Brexit and his lecture will be on the same topic.
For more on the conference and to buy tickets, please visit dublineconomics.com. Please note that, due to significant demand, there are no longer any rooms available at White’s. There is instead limited availability at the Maldron.
(Observant readers will have noticed that both named lectures are after economists with strong Kerry connections. Particularly in this, the 40th Annual DEW Conference, this is in recognition of the long association it has had with Kerry and with Kenmare in particular.)