Brian Cowen (Laois-Offaly, Fianna Fail)

We have economic and tax models which have ensured our unemployment rate stands at half the EU average and our growth rate is more than 2.5 times the euro zone average. These models include low taxes on employment and enterprise and different indirect taxation levels. It is a question of how a tax system is structured.

The one-stop scheme idea concerns business consumer and Internet type businesses and the operation of a VAT regime in which businesses do not have to register for VAT in respect of each country in which they trade. Common rules are being devised which would enable such a system to work more efficiently and the benefits of this proposal may be seen for people operating such businesses in Ireland.

Discussions took place to reach agreement before the end of the year on modifications to EU rules on the reduced rates of VAT applied by member states. The Council agreed to return to this issue in December. We are prepared to contribute further to work on the area and will continue to protect our zero and reduced rate items. When this dossier came before us in the past, efforts were made to reach a compromise based on losing a zero VAT rate, of which we are not in favour. The compromise proposal that has emerged under the UK Presidency seems to protect our position in that regard and, therefore, our disposition towards it has changed. We are now prepared to work further to determine whether a consensus may be built around the proposal.

On the financial services issue and cross-border consolidation in the EU financial sector, the Commissioner, Mr. McCreevy, was present for that part of the meeting and outlined the Commission's position. Three papers were presented on cross-border mergers and acquisitions in the financial services sector, namely, a communication on intra-EU investment in the financial services sector, a working document on cross-border consolidation and a working paper on the review of Article 16 of EU Directive 2000/12/EC. Presidency conclusions were agreed with regard to supporting the continuation of the Commission's work on reviewing the obstacles to cross-border consolidation in the financial services sector and the issue will be further discussed at future ECOFIN meetings.

I believe in ensuring that an internal market on financial services will be of benefit to us. The more the Single Market integrates, the greater the experience for Ireland. The financial services industry in Ireland will function more effectively if obstacles do not get in the way of cross-border mergers and acquisitions. Ireland has experienced six takeovers of banks by international players such as Skanska, Rabo and Bank of Scotland. This results in increased competition, improved products and better deals for consumers, and the more we are open to it, the better. While we all share the desire to see that the headquarters of major Irish banks are retained in Ireland, we must ensure that Ireland continues to have a strong banking system. Competition has had a positive impact and an internal market in financial services is in the interest of this country.

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