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Irish Parties Spar Over EU Taxes

by Jason Gorringe,, London

12 December 2011

A major split between countries at the latest European Union (EU) summit is worrying for Ireland, opposition leaders have said, raising concerns about the impact of a new deal on the country's financial services sector.

The UK's Prime Minister walked out of the late night talks after failing to secure 'adequate provisions' to safeguard what he says are the country's interests. His actions leave the UK the only EU member outside the new agreement, which aims at strengthening fiscal discipline and includes more automatic sanctions and stricter surveillance.

Speaking on behalf of his Fianna Fail opposition party, former government minister Micheál Martin said he doubts the UK will be joined by other countries in opting-out of the tighter rules. He is concerned that, for Ireland, "there is the added danger that our most important trading partner is taking a different route."

The current Finance Minister Michael Noonan has previously spoken of the danger of a financial transactions tax being imposed throughout the eurozone in isolation from the rest of the EU. He has said implementing it in Dublin but not in London would be "very onerous". It is thought that concerns for the UK's own financial sector is one of the main reasons Cameron vetoed the EU deal. He is set to explain his decision to parliament soon.

Martin then urged the Irish government to offer "immediate reassurance that there is nothing in the enhanced cooperation and control rules that could impact on the financial services sector or corporate taxation."

Responding on behalf of the coalition government, Michael McNamara, a Labour member of the parliamentary Finance Committee, slammed Fianna Fail's call to resist any financial transaction tax as opportunistic and said it shows the party has learned nothing from its time in government, when Ireland was forced to seek a bailout.

He commented, "The latest Fianna Fail fad is to follow David Cameron's Eurosceptic agenda. Of course, we realise that a transaction tax, like other fiscal harmonization measures has to be carefully considered. However, there can be no blanket exemptions, least of all for those who contributed most to the mess we're in".

TAGS: tax | economics | business | Ireland | fiscal policy | banking | financial services | international financial centres (IFC) | tobin tax | United Kingdom | offshore | agreements | tax reform | European Union (EU) | services | Europe

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