Brian Cowen (Laois-Offaly, Fianna Fail)

The Deputy will be aware that advices from the Attorney General are not available to anyone other than members of the Government but the basic point behind the wording is no transfer of competence will take place under this proposal and that has always been seen as the threshold of requirement in terms of whether a referendum is required based on the Crotty judgments.

With regard to President Sarkozy's comments, I was informed as I rose to reply to Deputy Gilmore yesterday that the Minister of State, Deputy Roche, had issued a statement. I presume he did. I do not have the details but I will obtain the statement for the Deputy and send it to him. I also made the point in my response that President Sarkozy had been reiterating a position which has been mentioned in other quarters apart from what was picked up by the media recently. I also stated that I made our position clear at the European Council meeting and put it on the record. The president knows directly from me what is our position on this matter since we discussed it at a round table dinner session of the Council when the question of what work would be ongoing within the Eurogroup regarding growth, stability and currency issues generally in the euro area was discussed.

My colleague, the Minister for Finance, has reiterated on numerous occasions our commitment to maintaining our 12.5% corporation tax rate, including at the time of the EU-ECB-IMF funding negotiations. I strongly defended our position in this regard at last month's European Council and will continue to do so. It is the cornerstone of our industrial policy and an essential feature of our future growth strategy. This has also been emphasised to EU authorities on many different occasions and we are clear that this is the position under the EU treaties. There is no evidence that imposing a higher corporate tax rate would sustain higher revenues or contribute in any way to restoring balance to the public finances. All impartial analysis points in the opposite direction, supporting the view that the 12.5% rate is key to sustaining our attractiveness to foreign direct investment and to sustaining the export-led recovery under way. Corporate tax revenues in Ireland are at a similar level to other EU countries. They were equivalent to 2.9% of GDP in 2008 compared to a weighted average of 2.7% for the EU as a whole.

Notwithstanding the views of any particular person or member state, direct taxation remains a matter of national competence. Furthermore, in the event of any matter arising for decision at EU level, unanimous approval of all 27 member states, including Ireland, would be required. This was confirmed in the context of the Irish guarantees on the Lisbon treaty. The European Commission has indicated that it intends to bring forward a proposal for a common consolidated corporation tax base later this year. Ireland and many other member states are opposed to such an initiative, which, in any event, would require unanimous approval. However, even in this context, the Commission, President Barroso and Commissioner Rehn stress that the adjustment or harmonisation of rates is not envisaged.

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