October 6, 2023 - 1:00pm
Ireland has Europe’s weirdest economy. Ever since 2016, when the Republic posted an annual growth rate of 26% (no, the decimal point isn’t missing) it’s been clear that something is up with Irish GDP.
That something is the outsized presence of multinational corporations, for which Ireland serves as a very convenient European base. An accommodating tax system means that if a multinational can contrive to move profits earned elsewhere, an awful lot of tax can be legally avoided.
But is this economic model under threat? To paraphrase HG Wells, “intellects vast and cool and unsympathetic are regarding Ireland’s success with envious eyes and slowly and surely they are drawing their plans against it.”
I speak, of course, of the European Commission — which is short of cash and looking around for places from which to grab it. The particular urgency is that the money the Commission borrowed during the pandemic needs to be repaid soon.
According to a report for RTÉ, the Commission has a cunning plan. The proposal is for an indirect levy of 0.5% on the gross operating surplus (GOS) of each country’s corporate sector — i.e. on “the profit made by companies on the goods and services they produce after they have paid their workers and for raw materials, services and overheads”.
It’s indirect in this case because instead of being paid directly by the relevant corporations as a tax, the equivalent sum would be diverted from each country’s public funds and into the coffers of the European Commission. It’s a sneaky way of pretending that Brussels isn’t centrally imposing a tax on member states — when, in fact, that’s exactly what this amounts to.
With their disproportionately large corporate sector, the Irish would be hammered. According to the RTÉ report, Ireland’s total GOS was €25 billion in 1995 but nearly €300 billion in 2021. A levy of 0.5% would therefore add €1.5 billion to the €2.6 billion that Ireland currently contributes to the EU budget.
There are still months of wrangling to go on this scheme, but the message to the Irish is clear: life in the EU is about to get a whole lot harder for you.
Ireland’s economic model is obviously at the expense of its neighbours, but for years this was tolerated. That’s for two reasons: firstly as a quid pro quo for Irish good behaviour during the Eurozone crisis, and secondly as a gesture of solidarity against the villainous Brits.
On that last point, Ireland needs to remember what motivated the EU freakout over Brexit. It wasn’t the fear of other exits, which the single currency makes all but impossible. Rather, it was the idea of a low-tax, low-regulation competitor across the English Channel.
But now continentals are calming down over that, they’ve remembered that there’s another offshore tax haven across the Irish Sea. They’re unlikely to forget — especially if there’s money to be had.
Of course, from a British point of view, this all seems rather distant. But if we were still in the EU, this would cause a huge issue for us too. Presented with a multi-billion-pound demand for more cash, we’d have been sorry not to have got out when we had the chance.
Peter Franklin is Associate Editor of UnHerd. He was previously a policy advisor and speechwriter on environmental and social issues.
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SubscribeYou can’t blame government for societal change. You have family breakdown, single households with multiple kids; absent fathers, parental dysfunction. Where did all that come from? The trajectory started in the 60s and the break from what was seem as the stultifying suppression of individual expression and pursuance of personal identity in priority over obligations to adhere to social norms and expectactions.
This article might as well be in the Guardian given its endless platitudes and sympathy for these ‘teenagers with no money and no hope who yearn for £120 trainers’. These people have free education (albeit a very poor state education devoid of all reason, rigour or discipline), free healthcare, and live in a city that offers more opportunity than almost any city in human history. Meanwhile, their families are in receipt of all manner of welfare – most of them probably don’t even pay their own rent. Really, there is nothing ‘Unheard’ about this – we have heard it a million time on the BBC/CH4 and The Guardian. And we don’t want to hear it any more.
“The county lines phenomenon is the manifestation of widespread government neglect“
No. The county lines phenomenon is the manifestation of widespread parental neglect.
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It’s a failure of schooling and parenting (as usual) 13 year olds know pretty much nothing at that age and yet are told squarely that they have nothing to look forward to whilst at the same time the bad guys are not shown as such but are glorified! No surprises then…the girls all want to be sex workers and the boys dealers!
As other have pointed out, poverty is merely an indicator of a deeper problem. How many of the county line kids come from families with two married parents?