Ireland's simultaneous defence of its corporate tax regime and generous EU structural funding was looking more difficult than ever as the Taoiseach, Mr Ahern, last night flew in to Vienna to a two-day summit of EU leaders today. He may, however, take some comfort from the apparent revitalisation of the duty-free debate.
Although ostensibly unrelated, the issues of corporate tax and structural funds were again clearly linked yesterday by the German Chancellor, Mr Gerhard Schroder, only a day after he reluctantly signed a declaration with the British Prime Minister, Mr Tony Blair, renouncing ambitions to harmonise corporate taxes. Mr Blair is now hoping to have that declaration included in the summit conclusions.
In a pre-summit statement to parliament, Mr Schroder reiterated that Germany will demand a reduction in its contribution to the EU budget as part of the process of budget reform. He said Germany paid £9 billion a year more into Brussels than it received in subsidies.
Germany could not endure the dual pressure of being Europe's paymaster while capital fled the country for tax havens in other EU states, Mr Schroder argued. Few doubt he has Ireland in his sights.
But diplomats do not expect significant progress in the deadlocked debate on the EU's post-2000 budget at the summit beyond a strong statement of commitment to resolve the matter.
Mr Ahern's other main preoccupations today will be a breakfast meeting with Mr Blair on the North, the duty-free issue and the soundings he will be able to take on the appointment of a foreign policy supremo for the EU, a job the former Tanaiste, Mr Dick Spring, has his eye on.
A U-turn by the Swedish Prime Minister, Mr Goran Persson, has upped the pressure on Holland, Denmark and Finland not to block an extension of duty free. Britain, France, Germany, Ireland, Spain, and Luxembourg support an extension.
Meanwhile EU foreign ministers marked the 50th anniversary of the Universal Declaration of Human Rights with a ceremony in Vienna's Imperial Palace. Ireland was represented by the Minister for State at the Department of Finance, Mr Martin Cullen.
The EU and Switzerland clinched a long-awaited bilateral trade accord late last night, said Portugal.
