German Greens on campaign trail criticise Irish corporate tax regime

Germany's opposition Green Party has said it was a mistake not to force Ireland to raise its corporate tax rate as part of its EU/IMF programme.

Jürgen Trittin, the party's lead candidate in next month's federal election, said he supported demands by the Social Democratic Party (SPD) to harmonise corporate tax structures at EU level to close tax-avoidance loopholes for Google, Apple and other multinational concerns with bases in Ireland.

"I think it was right to force Cyprus to raise its corporate tax rate and I don't think it was smart to do without this in the case of Ireland," said Mr Trittin, often named as a potential foreign or finance minister in the next German government. Greater co-ordination of tax laws and structures was desirable, he said, to "end tax dumping via holdings and foundations and other structures".

“Harmonisation doesn’t mean we have the same tax rate – I understand countries like Ireland have other tax rates . . . because there there needs to be a bit of competition – but there has to be a [rate] corridor,” he said.

At the weekend SPD leaders promised, if elected, to demand changes to corporate tax regimes in Europe as a condition of further German assistance to crisis-hit EU countries.

SPD strategists say flagging the corporate tax issue is not an attempt to single out Ireland, but to challenge Chancellor Angela Merkel’s efforts to keep Europe and the euro crisis off the federal election agenda.

The Greens, which Mr Trittin called yesterday the "most pro-European party in Germany", say they will campaign for the need to strengthen European institutions as the lesson of the euro crisis.

"We view the rise of an intergovernmental Europe in the crisis under Dr Merkel as a break with the tradition of Helmut Kohl, " he said.

Close failing banks
Abandoning the more traditional "community method" – managed by the European Commission – allows member states undermine important post-crisis projects such as a pan-EU banking union to oversee the continent's financial industry.

"We want to give the commission power to close failing banks because we don't trust France to close BNP Paribas or Germany to close Deutsche Bank if necessary," said Mr Trittin.

Ahead of the September 22nd poll, it’s a sign of the times in Germany that the Green Party’s current manifesto is the first in its 30-year history not to contain a demand for an end to nuclear power.

Chancellor Merkel's decision to phase out nuclear power by 2022, following the Fukushima disaster, is just one of many recent shifts in her Christian Democratic Union (CDU) that have made a CDU-Green coalition less of a policy no-go than in years past – and one of the most speculated-on options when polls close.

In common with leading CDU figures Mr Trittin dismisses such talk – in public at least – naming a long list of Green proposals Dr Merkel’s party opposes, from a statutory minimum wage, greater investment in renewable energy and more liberal citizenship rules.

Behind the scenes, however, senior Green officials concede the big roadblocks have fallen and they have to be open to new options if the SPD campaign continues to stagger on.

Another reason for party leaders to embrace a pragmatic coalition with the CDU, shifting away from the traditional Green “fundamental” roots, is a last chance for many of them to enter cabinet before retiring.

A recent poll suggested that 45 per cent of Green voters could envision an alliance with the CDU.

Hypocrisy accusations
Sizing each other up before the election hasn't stopped the Greens attacking Dr Merkel as a hypocrite in her reform and austerity demands. Under her leadership, he pointed out, German borrowing has jumped to 82 per cent of gross domestic product – mostly a result of one-off measures to prop up financial institutions.

“The chancellor likes to walk around telling everyone they should save money like we have,” he said. “But a quarter of our total deficit has been run up on her watch.”

On one crucial point, however, the Green Party appears in agreement with the CDU: Mr Trittin said yesterday all of its election proposals would be implemented “without running up new debts”.