Ireland Will Fight To Keep National Tax Veto

by Ulrika Lomas, for LawAndTax-News.com, Brussels

22 July 2003

In a recent interview with the Financial Times, Ireland's Finance Minister, Charlie McCreevy announced the Republic's strong opposition to proposals contained within Valery Giscard d'Estaing's draft EU constitution, which would remove the national veto for EU member states in certain circumstances.

Under the terms of M. Giscard d'Estaing's draft constitution, if all member states were to agree that a proposal related to either administrative cooperation, or to tackling tax fraud, they would lose the right to a national veto in any votes on the proposal in question.

However, Mr McCreevy told the FT that the ability of a country to veto proposals 'goes to the heart of a representative democracy', adding that: 'Our position would be quite clear. We will be against this.'

Observers have suggested that Ireland may use its veto to block what it sees as the thin end of the tax harmonisation wedge at the forthcoming intergovernmental conference (IGC) on the proposed EU constitution, which has been scheduled for October.

However, it will likely face a fierce fight from member states such as France and Germany, which advocate a degree of fiscal harmonisation, arguing that low tax policies such as that advocated by Ireland can distort investment within the EU.

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