Business

Trading deal for North must not endanger EU’s single market - German finance minister

Christian Lindner is in Dublin for talks with his Irish counterparts on a range of issues

Christian Lindner says it is important that life and business in Northern Ireland can function as smoothly as possible without endangering the requirements and standards of the single market. Photograph: Betty Laura Zapata/Bloomberg

Derek Scally Berlin Correspondent
Mon Feb 12 2024 - 18:11

German finance minister Christian Lindner has said any special post-Brexit trading arrangements for Northern Ireland with the EU and UK must not be allowed to endanger the European single market.

In Dublin for talks on Tuesday, Mr Lindner, of the Free Democratic Party in Germany, praised his “close exchange” with Minister for Finance Michael McGrath and Paschal Donohoe, Minister for Public Expenditure and Reform. The latter, as Eurogroup president, ensured the Eurogroup was “well steered”.

“Traditionally we have very close ties with Ireland, we are like-minded in fiscal policy,” Mr Lindner said.

As Europe’s largest economy – and largest beneficiary of the single market – Germany has watched closely recent developments in Northern Ireland, in particular the creation of “green lanes” to aid trade between the province and Britain.

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Mr Lindner said it was important that life and business in Northern Ireland “can function as smoothly as possible” without endangering the requirements and standards of the single market.

“A level play field must exist,” said the 45-year-old minister. “I don’t want to call into question or sow doubt about the agreement for Northern Ireland. It has been struck and now it has to be lived, but we have to be sure that the single market remains whole and orderly.”

He said Germany remained confident that oversight authorities would do their jobs and that “everything can be arranged to our mutual benefit: Ireland, the EU and the UK”.

After years of critical German talk – but no action – over Irish tax policy, the liberal finance minister said “there’s nothing to be said against fair tax competition so that economies can, for instance, use lower tax rates to overcome infrastructural disadvantages”.

He praised the OECD’s 2021 landmark global tax deal, which went live this year with a minimum 15 per cent corporate taxation rate, as a “great step forward”. This meant that “tax dumping is no longer possible though tax competition is still allowed”.

“What is important, after the OECD agreement, is that political agreement on the OECD tax pillars is progressed,” he said.

In London on Monday Mr Lindner hoped for intensified German-British bilateral ties and said it would be “sensible that European member states of Nato intensify their security co-operation under the Nato roof still further”.

With his ruling coalition just past its halfway mark in power, Mr Lindner said unprecedented challenges – posed by war, inflation and climate challenges – were complicated by a lack of political cohesion.

Facing challenges “as three different parties” – such as agreeing a federal budget on the second attempt – meant “results are not always a given but we are making progress”.

“A basic problem of this coalition is that the good results are not being communicated by the coalition partners equally,” said Mr Lindner.

Senior FDP sources accuse SPD and Green allies of failing to back joint agreements in public, creating “irritation” among voters.

The FDP is most in danger from such voter irritation and is polling just 4 per cent – one point below the hurdle for Bundestag representation.

Mr Lindner rejected his coalition partners’ claims that the FDP was blocking policy on a wide range of fronts, from EU supply chain law to rent control legislation.

Mr Lindner’s visit comes days after EU agreement on a long-promised fiscal rule reform with limits on public spending, a key Berlin demand, and annual targets for cutting excessive public debt over four-seven years.

Derek Scally

Derek Scally

Derek Scally is an Irish Times journalist based in Berlin

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