Macron’s grand tax plans ‘haven’t a chance’

T HIS is a tale of good news, bad news, and eventually, maybe, some good news. Good news: the youthful French president Emmanuel Macron wants to inject new verve into the Brexit-battered European Union which is now languishing in the doldrums and badly in need of reforms.

Bad news: his wideranging, ambitious plans include Ireland and other member states paying more to Brussels’s coffers, a prompt move to an EU company tax regime, and more EU defence moves which will have the Irish neutrality defenders doing handstands.

Maybe some good news: there are many people who know about these things who believe Mr Macron’s big ideas will never happen.

Firstly, to Mr Macron’s plans. In fairness to the 39-year-old new broom, he is trying to do what he promised in his election wins in May and June. He pledged to inject new life into the EU to stop voters in many nations flocking to hardright and hard-left parties.

On Tuesday, Mr Macron went to the Sorbonne and spent an hour and 40 minutes belting out his big EU plans for the immediate future. Among the things leaping out was much bigger contributions to EU coffers.

The subscription is currently on 1pc of GDP – he wants that upped to “several percentage points”.

He also called for the EU to work more closely on defence and immigration and for the 19-nation euro currency zone to have its own budget.

The French president advocated a new type of tax on technology giants like Facebook and Apple, based on how much value they create in a country rather than on their profits, along with taxes on financial transactions across the EU.

None of that is particularly good news for Ireland, which continues to insist taxation is a matter for national governments. At his first EU leaders’ summit in Brussels, on June 23, Taoiseach Leo Varadkar made it clear that his future EU view varies significantly with that of Mr Macron.

But will any of it actually happen? Dublin Fine Gael MEP Brian Hayes has insisted it will not. He relies on the reality that taxation changes need the unanimous agreement of member states. That gives Ireland an effective veto for the foreseeable future and probably beyond.

Others will look to the German federal election outcome for solace. Chancellor Angela Merkel will return to power considerably weakened and less able to deliver a “legacy boost” to the EU as her expected coalition allies have problems with Mr Macron’s plans.