Former US Speaker Gingrich Backs Ireland In Fiscal Dispute With Brussels

Robert Lee, Tax-news.com, London

15 March 2001

Irish Finance Minister Charlie McCreevy looks to be heading towards another boxing bout with the EU over the Republic's budgetary and tax policies. He is still claiming that every EU state has a right to determine its own regime, despite reports of his Belgian counterpart Didier Reynders saying that there is now unanimous support for closer co-ordination of monetary and fiscal policies. Mr McCreevy, however, looks to have found an ally in Newt Gingrich, the former speaker of the US House of Representatives, who has been in Dublin this week openly backing Ireland in its dispute with Brussels.

According to Mr Gingrich, the EU bureaucracy is statist, timid, risk averse and is trying to slow down the Irish economy to a pace with which it feels comfortable. Of the attempts by Brussels to curb the Irish government's spending and tax cut drive, he said: 'When you look at the facts, Ireland is creating jobs, creating wealth and offering employment for its young people. It seems to be that the EU ought to be looking at how do we get the continental powers to imitate Ireland.' Mr Gingrich said he thought it 'bizarre for the European bureaucracy to pick a fight with Ireland when Ireland is the winning model.'

Mr Gingrich reiterated his admiration for the growth of the "Celtic Tiger", saying: 'Your tax rates have encouraged companies to invest here, which is very smart. You have really reached out very aggressively to encourage companies and help companies come here and I think things like your new MediaLabEurope are going to continue to see the evolution of Ireland as a growing, dynamic centre of ideas and jobs.' Moreover, he described the recent reduction of capital gains tax in Ireland from 40 per cent to 20 per cent as 'as good an example of supply side economics as you will find elsewhere in the world.'

However, Mr Gingrich warned that whatever the achievements and successes of the past decade, Ireland should proceed with caution in the current uncertain global economic climate, particularly in light of the current slowdown in the US.

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