The Taoiseach, Mr Ahern, travels to Bonn today for a highly significant meeting with the German Chancellor, Mr Gerhard Schroder. Mr Ahern will be keen to establish a good personal rapport with the Chancellor and to build on the very strong relationship that this State enjoyed with his predecessor, Dr Helmut Kohl. The omens for the meeting are not propitious. The Vienna Summit may have managed to defuse a potential conflict between Ireland and Germany over corporation tax but it is clear that the Chancellor's approach to issues affecting Ireland is more pragmatic and certainly less sentimental than that of his predecessor.
Dr Kohl was always a great friend of this State, not least because he saw the Republic as a striking example of what could be achieved by a smaller state within the EU. Under his leadership Germany was in the vanguard of those defending the interests of the smaller states in Europe and, in the overall interest of the Union, he was anxious that states like the Republic were able to punch above their weight around the negotiating table in Brussels. Not least, Dr Kohl was also a firm supporter of strong structural and cohesion funding in order to allow Ireland bridge the wealth gap with the rest of Europe.
Mr Schroder's approach is less visonary and, perhaps, more inward-looking. Buoyed up by the strong mandate he secured in the German elections, the new Chancellor has placed a new emphasis on the German interest. The message is clearcut: Germany can no longer afford to be the paymaster of the European Union. At his final press conference in Vienna, the Chancellor clearly signalled the new approach. Germany, he said, had no problem with the richer countries supporting the poorer ones - but solidarity was a two-way street.
During its six-month presidency of the EU, which begins on January 1st, Germany faces the formidable task of pushing through the controversial Agenda 2000 reform package by the end of March. Germany is determined to reduce its net contribution to the EU budget as part of Agenda 2000 negotiations which also cover such issues as reform of the Common Agricultural Policy and Britain's rebate on its budget contribution. From the Irish perspective, the significance of these discussions could scarcely be exaggerated.
Over the coming months the Government will be battling against a proposed "re-nationalisation" of the CAP which would see national governments, rather than Brussels, help fund much of the payments. On another front, the Government will also be working to ensure that any reforms in the EU's internal funding arrangements do not weaken the level of supports available for structural funding.
It may be that the tax harmonisation issue itself is also not fully resolved. Some progress has been made which will help to protect this State's low corporation tax regime. It appears that the German government is no longer pressing for tax harmonisation per se. Rather, it appears satisfied that the principle of fair tax competition is accepted. But the issue is likely to resurface - especially if there is an economic downturn in Europe. Today's meeting will be critical in helping to forge a strong relationship between Dublin and the new administration in Bonn. Mr Ahern will clearly need all his much-admired negotiating skills as he works to defend vital national interests.