Corporation tax stance supported

Two major international newspapers have written strong editorials criticising the EU Commission for questioning Ireland's corporate tax regime.

The Wall Street Journal has defended Ireland's plan to lower corporation tax rates against what it calls a "threat" from the EU Commission to withdraw funding "if Ireland does not mend its ways - that is raise taxes".

In an editorial headed "Taxing the Celtic Tiger", the newspaper says: "Ireland's finance minister apparently just got a talking to from the European Union's competition commissioner (yes, there is such a post). Ireland is accused of unfairly attracting investment with low corporate tax rates and resisting the acceptance of a `code of conduct' that European finance ministers were trying to agree last Monday."

Officials of EU Competition Commissioner Mr Karel van Miert were hinting that EU aid to Ireland could be cut unless the taxes increased, it said. It concludes: "If Ireland's leaders are indeed faced with a trade-off, they would be wise to opt for the lasting benefits of a liberalised economy, not the temporary palliative of EU money."

Meanwhile, the London Times asks: "When is a tax not a tax? As far as the European Commission seems to be concerned, when it is levied in Ireland." In an editorial headed "Ireland needs Allies", it says that other EU states need to rally round and support us.