New Irish Finance Minister Speaks At EU-American Chamber Of Commerce

by Amanda Banks, Tax-News.com, London

14 May 2008

Ireland's new Minister for Finance, Brian Lenihan on Wednesday spoke to the EU American Chamber of Commerce in Brussels to discuss how ratification of the Lisbon Treaty will restate Ireland’s position within the European Union.

"Since Ireland joined the European Union in 1973, the people of our country have taken successive opportunities to reaffirm their commitment to the European project. We acknowledge that the EU is the most successful peace project in history. We know that the development of the EU has created unprecedented peace, economic and social growth throughout Europe in the past 50 years," Mr Lenihan began, moving on to address the Lisbon Treaty:

"The fact is that the Lisbon Treaty does not, in truth, introduce changes on the scale of, say, the Single European Act, which paved the way for the single market, or the Maastricht Treaty, which set out the basis for the euro and the Union’s Common Foreign and Security Policy."

"But it does make important administrative and procedural changes which will make the EU more efficient and effective in its everyday actions. These changes will greatly improve the manner in which a Union of 27 or more Member States, can serve its citizens," he added, continuing:

"At present, the Irish Government is taking action to improve the efficiency and effectiveness of our public sector on foot of a wide ranging OECD report. We should assist the EU in doing likewise with its administrative functions through the ratification of the Lisbon Treaty."

"We are the only Member State to hold a referendum on the Lisbon Treaty. We have an opportunity to demonstrate once again our strong commitment to Europe, which has been of such enormous benefit to Ireland, and our strong commitment to the principle of reform of institutions to improve their efficiency and effectiveness."

Mr Lenihan then went on to discuss the issue of tax under the treaty, explaining that:

"I wish to set the record straight on a number of issues directly related to my Department’s responsibilities about which there has been some scare mongering."

"I’ll deal first with the issue of tax sovereignty, which I know is of concern to those of you who have invested significantly in Ireland and indeed in other EU member states," Lenihan stated, continuing:

"First, the Reform Treaty does not change any of the existing arrangements in relation to taxation matters. Second, Ireland's veto over any EU proposals in the taxation area remains."

"I do not think it is possible to be more unequivocal than this. Even opponents of the Treaty must acknowledge the truth of these statements as more and more reasonable and well informed commentators confirm the facts."

"The independent Referendum Commission has verified that Ireland's taxation veto is retained in the Lisbon Reform Treaty. This is clear, unambiguous, independent and totally consistent with what the Government has been saying all along. The retention of the veto was one of our key achievements in the Treaty negotiations," he revealed, going on to add:

"Moreover, the President of the European Commission, Manuel Barroso, has confirmed Ireland’s tax policy veto in his recent speech to the Forum on Europe in Dublin. He has stated that no tax policy change can be imposed on Ireland, without our consent."

Lenihan told those in attendance that:

"Finally, the No campaign claims Article 113 of the Treaty could allow the European Court of Justice to force changes to our corporate tax regime on the grounds of avoiding a “distortion of competition.These claims are fanciful for two reasons."

"First, Article 113 deals with indirect tax and could not be used as a basis for any judgements on corporation tax."

"Second, the opponents of the Treaty choose to ignore the opening words of the Article itself which makes it clear that the Council's actions, even in this specific area, must be by unanimity."

"Let us be clear: the “No” campaign is simply wrong on the issue of tax sovereignty. There is no change in the existing position; the Lisbon Treaty does not undermine Ireland’s national position on tax matters and tax sovereignty," he argued.

Mr Leninhan closed his speech by stating that:

"A Yes vote to the Lisbon Treaty will ensure that Ireland remains at the centre of a more effective and efficient European Union. It is precisely this status that has brought us the high level of Foreign Direct Investment that we have achieved thus far. I believe the single market will become even more important as we focus on export led economic growth to compensate for the readjustment of housing construction to more sustainable levels."

"By endorsing this Reform Treaty, we can give a lead in Europe and at the same time help secure our future prosperity. Ireland has benefited from being at the centre of Europe and Europe has benefited from Ireland being at the centre of Europe. That is why the Government and indeed our leading opposition parties will be saying to the Irish people in June “Vote Yes for a better Ireland and a better Europe”. I encourage you to do likewise."

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