The real cost of the EU’s solidarity over Brexit

THERE is nothing for nothing in politics, no free lunches. Principles are ultimately bartered in transactions. The EU is squeezing Britain and supporting us for a ‘no-border Brexit’ – but it is demanding a reciprocal sacrifice from us.

The EU Commission and France’s President Macron want us to surrender our tax sovereignty and allow Brussels to impose a EU-wide digital tax on US multinational corporations. It could effectively mean us abandoning the low corporate tax model that has attracted so much US direct investment to Ireland.

And they want Pascal Donohoe to agree on a 3% digital sales tax before a meeting of EU finance ministers to be held in Brussels this week.

So is the EU’s solidarity with Dublin for a no-border Brexit conditional on us abandoning our tax sovereignty?

The irony is stark, because Britain has always supported our low corporation tax strategy.

President Macron has patiently waited for the weakening of Angela Merkel in Germany while building support for the digital tax.

Donohoe is expected to buy time at the meeting this week but the EU Commission expects the draft directive to be agreed in December. And it wants it implemented before the current EU Commission’s term ends next year.

Irish business lobby group Ibec fears the EU digital tax proposal will be seen as a tariff targeting US tech firms and draw retaliatory measures from Washington. Leo and Paschal are playing by Big Boys’ Rules now.