by Tyler Durden
If you thought Olli Rehn's "intervention" in Ireland's "democratic" process would end with his yesterday involvement in the voting process, you may be surprised to learn that diktat #2 is coming up. As we speculated last week, the first casualty of the Irish loss of sovereignty will be the country's lowest among the DM countries corporate tax rate. Today we read in the RTE that we are one step closer to being proven right: "A row has broken out in the European Parliament over Ireland's 12.5% corporate tax rate. It has emerged that eight, mostly French and German, MEPs have issued a declaration attacking Ireland's corporate tax rate and calling for a minimum EU wide corporate tax rate of 25%." Furthermore, these are not just any MEPs: "What has heightened the dispute is the fact that the eight MEPs are all co-ordinators for the different political groupings in the parliament and are, as such, representatives for those groupings on an influential parliamentary committee." While it is not a done deal yet, the days of the Irish tax haven may be numbered: "The declaration invites signatures from other MEPs and if it can gather the support of 350 MEPs it then becomes the position of the European Parliament." And here is how the new diktatura will spin its control over the Irish state:
The statement claims that European taxpayers and citizens have been put at risk 'in order to stabilise a financial system which has been profiting from the exceptionally low Irish corporation tax rate of 12.5%'.
It goes on to suggest that Ireland's corporate tax rate is unfair and goes against the spirit of European solidarity, especially given the fact Ireland is receiving a bail-out.
'We urge the European Commission to advance on the dossier of a Common Consolidated Corporate Tax Base. We urge the European Commission, the Eurogroup and its members to ensure that the corporation tax rate will be increased to the average EU level of 25% in a spirit of solidarity,' the declaration concludes.
Sure enough, the Irish response is vocal:
Irish MEPs are understood to be furious at the declaration given that - as co-ordinators on the Economic and Monetary Affairs Committee (ECON) - they technically represent the same political groups of which Irish MEPs are members.
For now, Ireland retains what it believes is a veto:
Any Commission proposals concerning taxation, either the CCCTB or Corporate Tax, require unanimity, so Ireland retains a veto in this area.
Then again, Ireland seems to not recognize that its opinion no longer counts: after all it has ceded sovereignty to Olli Rehn and his merry band of thieves. Shortly, we expect Europe will make the tax issue a key trigger for any additional funds in the bailout process, taking any veto ability away from Irish control.
Elsewhere, the Irish parliament has slammed the bailout deal, making any discussions of ongoing leverage over Ireland possibly moot if Ireland does the right thing and says "no mas" to its abdication of sovereign control. From the Irish Times:
During leaders’ questions Fine Gael leader Enda Kenny described the scheme as a “bad deal for Ireland” and said the future of the Irish people and the future of sovereignty had been decided upon behind closed doors.
“What happened last Sunday was a demonstration of art, craft and skill of national destruction," Mr Kenny said.
"This deal…was done as if people didn’t matter, as if people didn’t count and as if people didn’t exist. Do the deal in Brussels and let them [the people] eat cheese as the sleek limousines drive through the slush.”
Here is what Ireland should do: its citizens should quietly convert all their existing capital and savings into precious metals, force the government to default, convert PM into a de novo currency if so desired, give Olli Rehn the middle finger, and preserve their indepedence.
We are not holding our breath.