EU harmonisation rings hollow

One of the reasons that I liked economics as an exam subject was that an argument was always valid if you could back it up with some kind of supporting evidence. It didn't matter when, eventually, the opposite of what you predicted actually occurred. Once you could make a decent argument for your own scenario you could still rake in a few marks and secure a pass.

This intrinsic fuzziness is, of course, why you'll always get economists telling us that Option A might happen on the one hand while, on the other, Option B is also a reasonable possibility. And this is why there's such a debate going on about whether the EU Commission is right to censure Ireland about the give-away budget.

While the arguments for and against Mr McCreevy's largesse should really be confined to an economic arena (basically, good for the economy or not, Charlie?), the actual debate has widened out into a deeper discussion on our place in Europe.

Last Saturday, writing in this newspaper, Garret FitzGerald commented that our censure and be damned approach could lead, not necessarily to economic disarray, but to less EU goodwill towards Ireland. He suggested that to minimise unpopularity with our EU partners on account of our low corporate tax regime we should "avoid unnecessary aggravation on other issues".

I know what he means. Give a little on unimportant things and lessen the chances of being smacked around the head on bigger topics. But being nasty or nice has nothing to do with the inherent viability or otherwise of the Budget. If Charlie McCreevy thinks that he has made sound economic decisions then he is right to defend them to the hilt, regardless of whether he is being perceived as nasty or nice by anyone in Brussels.

Whether or not he has made sound economic decisions is another question entirely. Obviously, and on the one hand, the Budget was wildly expansionary at a time when the economy is racing along, growth is strong and inflation is still high. On the other, Ireland is running budget surpluses, the national debt is falling and so is inflation which - in the main - has been a result of a weak euro and higher oil prices.

On the one hand, Romano Prodi, the President of the Commission, argues that our policies are inconsistent with European guidelines and has proclaimed that the Commission must be "serious and severe". The Commission is, of course, already serious to the point of utter boredom for most of us. But, on the other, we have a Nobel economist in the McCreevy corner who believes that tax cuts, when we are running large surpluses, is absolutely right.

So there you have it. Two views. Triumph or disaster as far as Ireland is concerned. But at least based on policy and not based on being nice or not to our EU partners. However, the view that there is another issue (which was alluded to by Prof Mundell, the Nobel-winning economist) is not without some merit. And that's simply that other European countries don't like the low corporate tax environment that we've created. A lot of their financial businesses have done well out of this particular environment by locating in the IFSC but, understandably, that hasn't gone down too well back home.

The "hidden agenda" so to speak is the whole area of tax harmonisation, where the pressure is to harmonise up to other countries' levels rather than down to Ireland's. All I can say is that the US didn't have 10 years of economic bliss because of a high-taxation regime and, as far as Prodi, Issing, Welteke et al are concerned, they should get real regarding international business in this century. Higher taxation is never the route to go, no matter which hand you're looking at.

No debate, but plenty of media interest in the new chief executive of the London Stock Exchange, Clara Furse, who was appointed last week. As always, I cheered the appointment of a woman to a post of this calibre, while feeling a good deal of sympathy for her. The LSE is a bit of a poisoned chalice, given that the last three chief executives have either resigned in somewhat murky circumstances or been given the boot. The chairman of the stock exchange, Don Cruickshank, didn't get on with the last chief executive, so I'm hoping that he and Ms Furse hit it off a bit better.

They'll need to work together because the LSE has been through the mill lately. Last year was a particular nightmare with the abandonment of its plans to merge with the Frankfurt- based Deutsche Borse as well as the failed take-over attempt by the Swedish technology company, OM Group.

According to some media reports, Ms Furse is "a tough woman". She's been working in the City for the past 21 years, so if she's not tough by now she ought to be.

It always amuses me how, once a woman is appointed to any position in authority in the business world, she's usually tagged as "tough". Or determined. Or forceful. I've been called a few of those names myself, which just goes to show how wrong those reports can be because everyone who knows me knows that I am a big softie at heart. I cry when I hear sad songs, for heaven's sake.

I never cried in the office though - except for the morning when the vet rang to say that they couldn't do anything for my cat and that he was too ill for further treatment. And - just to prove that not all men are tough bastards either - my male colleagues were very sympathetic.

Times are changing, whether it's in the heart of Europe, or Dublin, or London. Whenever things change there are always people who'll preach doom and gloom, as well as those who rush in headlong without thinking things through. I'm hoping that the EU Commission is wrong and that Ireland's boom will end in a featherlight landing rather than a messy implosion.

But (despite everything) I'm not certain. I also hope that Ms Furse brings the LSE kicking and screaming into some century or other. I'm not certain about that either. But I do know that she won't sit down and cry if it all goes horribly wrong.