Reforms of the European Union’s internal market that proposed any “harmonisation” around national corporate tax rates would not be supported by Ireland, Taoiseach Simon Harris has said.
At the end of a two-day summit in Brussels the 27 EU leaders agreed to continue work on plans to make the bloc more competitive economically. The summit had discussed a return to the idea of creating a single market for capital in the EU, effectively bringing different national markets closer together and making it easier for money and investments to move around the bloc. The contentious reforms, first proposed in 2015, have for years failed to get off the ground.
Draft proposals on the policy drawn up in advance of the European Council summit drew opposition from Ireland and a number of other countries. The concerns centred on suggestions in a new capital markets union the EU would move to concentrate new regulatory powers or “supervision”, in countries such as France.
The changes would mean bringing together different national insolvency regimes, as well as more alignment on tax and regulation of the new market rules. France is believed to be in favour of the Paris-based European Securities and Markets Authority (ESMA) playing a much bigger role under the proposed reforms, as an effective regulator of the new EU capital market.
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Speaking on his way into the summit on Thursday, Mr Harris said Ireland would favour individual countries maintaining control over the supervision of any new rules and regulations. “This idea of the centralisation of supervisory functions to a number of small, large markets is not in the best interests of all member states,” he said.
“We want to see a capital markets union that respects the concerns of member states. We are not in the business of wishing to see any harmonisation to our corporate tax laws,” Mr Harris said. Ireland has previously been criticised for its 12.5 per cent rate, which in recent years it agreed to raise to a new 15 per cent global minimum rate.
[ Plenty of disagreement as capital market reforms return to EU agendaOpens in new window ]
An early version of the conclusions EU leaders were negotiating spoke about allowing the EU to “supervise” capital market actors, and “harmonising” national insolvency regimes. This was opposed by an initial group of 10 countries, including Ireland, with a number of further leaders later joining the group opposing certain aspects of the draft text. Much of the opposition had been based on a belief the initial proposed text on the capital markets union had been seen as too close to the French position.
In the end leaders agreed that the EU would continue work towards “harmonising relevant aspects” of national insolvency rules, and improve the “convergence” of capital market supervision.
Speaking afterwards, German chancellor Olaf Scholz said Germany and France would “stay committed” to capital market reforms, noting countries such as Ireland had traditionally taken a “bigger piece of the pie” when it came to corporate taxes. French president Emmanuel Macron said in his opinion the issue of more supervision at EU level was more pressing than tax harmonisation.
In a press conference after the summit, Charles Michel, the European Council president who chairs the meetings, said leaders had agreed European authorities would work with national authorities “to move forward together” on supervision.
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