There is going to have to be significant EU treaty change within the next few years to enable further EU integration, according to the EU Commissioner for Economic and Monetary Affairs, Olli Rehn.
If there is an EU-wide treaty change, then it would mean a referendum in this country, which would be a huge challenge either for this Government or the next administration.
“In the medium-term — 18 months to five years — we envisage further integration involving treaty changes. Our guiding principle is that any steps towards increased solidarity and mutualisation of risk would have to be combined with increased responsibility; that is, with further sharing of budgetary sovereignty and deeper integration of decision-making,” said Mr Rehn.
The European commissioner was in Dublin for a conference organised by the chairpersons of finance committees across the 27 EU parliaments. The event was chaired by Labour TD Ciarán Lynch.
The representative from the Finnish parliament, Kimmo Sasi, said some form of debt mutualisation in the form of eurobonds is essential if the eurozone is to survive. However, underlining the extent of the challenges that lie ahead, it is very unlikely that the Finnish electorate would agree to such a move, said Mr Sasi.
French senator Philippe Marini asked Finance Minister Michael Noonan what the update was on harmonising corporate taxes throughout the region.
Mr Noonan said proposals for a common consolidated corporate tax base would be released towards the latter end of Ireland’s EU presidency, which finishes in June.
Mr Marini said it was vital that progress was made on it. However, “the view in France is that Ireland’s [12.5%] corporate tax rate is too low. But it isn’t the only problem — there is the ‘Dutch Sandwich’ as well.”
Companies such as Google have avoided huge tax obligations by diverting large profits through Ireland and Holland.
Ireland remains implacably opposed to any harmonisation of the corporate tax rate, although the Government has agreed to engage in discussions.
Mr Noonan said it was very important that EU states follow through on an agreement reached at asummit last Jun 29 to break the link between sovereign debt and member states’ banking systems. The issue of legacy debt remains unresolved. Countries like Ireland want the ESM to take over legacy bank debt, although this idea is opposed by Germany, Holland and France.
What to do with legacy bank debt is being looked at by a special committee set up by the eurogroup of finances ministers and it will report shortly, said Mr Rehn.
© Irish Examiner Ltd. All rights reserved