Ireland's data protection regime risks burdening its reputation in Germany as much as its tax regime has done, according to an MP from the ruling Social Democratic Party (SPD).
Jens Zimmermann, SPD digital spokesman and Bundestag finance committee member, delivered his warning ahead of Taoiseach Micheál Martin's first official visit to Berlin.
Chancellor Olaf Scholz will greet him with military honours on Tuesday ahead of a working lunch and a private meeting.
"I very much look forward to the opportunity to discuss with Chancellor Scholz the close ties between our two nations," said Mr Martin ahead of the visit that will discuss the Ukraine crisis, Brexit and climate goals.
The two men have already met at European level and Mr Scholz, as federal finance minister until last year, had close dealings with Ireland over agreement on a global minimum tax of 15 per cent.
Mr Zimmermann said Ireland’s otherwise positive reputation in Germany was tarnished by its reputation as a tax haven. Now he sees a similar pattern on data: a growing, critical perception that Ireland is a soft-touch destination for large US companies anxious to sidestep EU data protection rules.
“Ireland needs to be careful because the data protection issue is increasingly becoming an issue like the tax issue was,” said Mr Zimmermann.
Last year, Germany's regulator attacked the Irish data protection commissioner (DPC) Helen Dixon for a "clear backlog" of cases, claiming she was "isolated" at European level debates.
While Ms Dixon has dismissed her critics as often misinformed, the Irish Council of Civil Liberties (ICCL) complained last week that a review of DPC operations, recommended last year by the Oireachtas justice committee, had yet to be launched.
Meanwhile. EU ombudsman Emily O'Reilly, on foot of an ICCL complaint, has begun an investigation into the European Commission approach to data protection and whether new EU rules, operating since 2018, are "applied in all respects in Ireland".
Scholz and Brexit
Mr Zimmermann says he expects progress in the second half of this year on plans to shift oversight of large tech companies to a new European regulator.
But even after last year’s tax deal, he predicts Ireland’s fiscal regime will remain a bone of contention in Germany. “The agreement was on a minimum tax which, though more than what Ireland has, is, in the end, still very low,” he said.
On key EU and Brexit issues, German observers say that continuity more than change is likely from the new Berlin administration.
Mr Scholz has been personally interested in Northern Ireland affairs since the 1970s and, as a former mayor of the northern port city of Hamburg, has a closer cultural affinity to the UK and Ireland than other German politicians.
As early as February 2019, he identified the Northern Ireland Border as the most difficult political question, on which peace hinged.
“If that’s not solved, I don’t like what we see in the future,” he said then.
German political observers say Mr Martin’s visit is a welcome opportunity – amid the Ukraine-Russia conflict – to flag growing uncertainty over Brexit.
"People in Berlin are puzzled by the Northern Ireland resignations but the new government is as firm as ever in holding to the Northern Ireland protocol as part of the Brexit agreement," said Michèle Auga, London director of the Friedrich Ebert Foundation, which has close ties to the SPD.
After meeting Mr Scholz, the Taoiseach will visit Berlin’s Memorial to the Murdered Jews of Europe, adjacent to the Brandenburg Gate, for a wreath-laying ceremony and a tour of its underground museum.