Marian Harkin (Sligo-Leitrim, Independent) | Oireachtas source

I congratulate the Minister of State, Deputy McConalogue, on his appointment. I wish him and the Taoiseach well at the important meeting on Friday. It is the Taoiseach's first meeting and there will be many intricate negotiations ahead on the MFF, Brexit and all of that in the shadow of the Covid-19 pandemic. I hope the Minister of State will be part of a good outcome for Europe and for Ireland.

I am pleased to see President Michel's proposals on the new negotiating box. It shows that if leaders from small member states come together, perhaps they can achieve positive outcomes. I support his proposal on the 2:1 balance of direct funding versus loan funding. I have real concerns, however, about the formula being used by the European Commission to calculate the amounts that will go from the recovery funds to different member states.

As we know, Ireland is coming off badly in this respect. Using GDP as a measure skews the situation in Ireland's case, of course. GDP has always been a double-edged sword for Ireland. Like other Deputies, I would like the Minister of State to give the Government's perspective on the European Commission's proposal and the way in which it intends to divvy out the recovery funds. The €5 billion Brexit reserve is welcome. However, is it included as a sweetener for Ireland getting less from the recovery fund? I know this is the negotiating phase, but I would like to see if we could nail down those two issues because they are going to be hugely important here.

Taxation will be high on the agenda and in many ways Ireland is skating on thin ice in this regard. I agree with the decision of the General Court of the European Union in the Apple tax case. I will return to that issue at another time. I was concerned at the time, however, and this has been confirmed by the General Court of the European Union, that the Commission's decision that Ireland had breached state aid rules was an overreach and an example of what is called "competence creep" on the part of the Commission. State aid rules are the sole competence of the Commission. Taxation is the sole competence of member states. We had a referendum on that issue here.

Ireland has a major responsibility concerning tax justice and in ensuring multinationals pay their fair share, but that is a separate issue. We need to be careful sometimes about what we wish for. I do not want the European Commission to have the power to dictate our tax policy, but I do want Ireland, as a nation, to play a strong role in ensuring European and global tax justice. We can do that through the OECD and the base erosion and profit shifting programme, and by engaging proactively with our European colleagues in pursuing a digital tax strategy which, crucially, does not disadvantage Ireland's tax take.

I spent 15 years in the European Parliament and time after time I saw one proposal after another coming forward on a common consolidated corporation tax base, which would disadvantage Ireland's tax take compared to other member states. We have to work with our partners, but we also have to ensure any new digital tax is balanced and fair. It must deliver for our citizens, but we must not be left between a rock and a hard place.

Finally, given that taxation will be high on the European agenda, there is much talk about the Commission looking at Article 116. That would allow it to make decisions on tax policy based on qualified majority voting and it would allow the European Commission to get rid of the veto. As I stated, that is the thin ice on which Ireland is skating. In the response from the Minister of State, I would like him to give me his perspective on that matter.

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