Oireachtas Joint and Select Committees

Wednesday, 13 March 2019

Committee on Budgetary Oversight

Scrutiny of European Commission Country Report Ireland 2019 and European Semester

Photo of Colm BrophyColm Brophy (Dublin South West, Fine Gael) | Oireachtas source

Before we conclude, I want to touch on an issue myself. In fact, Deputy Lisa Chambers alluded to it in her contribution. It is the question of taxation and subsidiarity in respect of Mr. Martínez Mongay's comments. I am a very strong pro-European and a strong believer in the EU. I appreciate that Mr. Martínez Mongay's job as an official is to convey views from member states back to the political side of it. The support Ireland has received in relation to Brexit is magnificent. However, it is a two-way street. It is not support of the EU for Ireland's position. Rather, it is Ireland as an equal member of the European Union having a position which benefits all member states. There is no expectation of any quid pro quo. We must be genuinely careful about the fact that stories are always out there about why things are being done. My firm belief is that the negotiations on the European side went well and a good withdrawal deal, which has now unfortunately been rejected by the British Parliament, was arrived at because it was in the interests of all member states to arrive at that common position.

Having put that marker down, I have to say that the way the Commission thinks about taxation is a real problem. We are not a federal state. We are a collection of states which work together. It is a long-standing principle of that arrangement that subsidiarity, in particular in the tax area, is crucial. I will point out where my thinking on this comes from. I appreciate Mr. Martínez Mongay speaking repeatedly in his contribution about a race to the bottom by inducements or whatever. There is also a feeling among smaller member states that there is a power grab by the top. As such, the economic policies that are most beneficial for the larger member states are being progressed by the Commission because there is a benefit in the ability to reduce subsidiarity. The point I make to Mr. Martínez Mongay ties in particularly with where we are going with the future direction of Europe. It is that type of thinking that turns the European citizenry off. It is the type of feeling that there is a centralisation whereby one or two larger member states make pronouncements of their view and that is then quickly mirrored in what the Commission states as its view. I am thinking of one or two particular leaders of large European countries who have quite a bit of difficulty running their own states. Every time they encounter those difficulties, they seem to think it is appropriate to pronounce on how they would like to run the Continent of Europe, as if they were presidents of that. When one then hears that mirrored by the Commission, however, it is an example of the type of thing the Commission should be guarding against, in particular in the area of taxation.

It is a sovereign right of a member state to control taxation. All we are looking for as a country when we talk about this is the respecting of that right. That is why I was very glad to see the digital tax go the way of the dodo the other day. It was a lesson in what happens when there is an attempt to bully smaller member states with certain proposals. I will let Mr. Martínez Mongay come back on that.

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