What goes around comes around? Amid growing displeasure in Dublin and beyond at the European Commission’s bout of leniency towards France on the fiscal front, Minister for Finance Michael Noonan will press the EU’s executive branch at a meeting today in Brussels to permit greater flexibility to all member states.
The commission has come the heavy on Ireland and various other countries in its dogged pursuit of ever- deepening retrenchment. Yet French president François Hollande recently extracted a two-year extension from the commission to meet deficit-cutting targets. Fiscal laxity in Paris is not new but France is a serial offender when it comes to missed objectives.
Other euro-area governments routinely meet their targets, pleasing the Brussels powers but antagonising their electorates. Now the latest exemplar of the exception française has triggered backlash around the zone, as smaller countries bemoan the application of double standards .
To make matters worse from an Irish perspective, France has tabled a discussion on corporate tax at today’s talks.
Noonan is expected to make the point that the ongoing acceleration in Irish economic growth should open the door for more fiscal leeway. The Minister has a point, although there is scope for debate as how much expansion is required or sensible at this point. With an election on the way and debt market conditions favourable, the Government argues that the cause of growth (and therefore employment) calls for further stimulus.
But another reflection is appropriate here. When Ireland was thoroughly in the doldrums, Hollande’s predecessor, Nicolas Sarkozy, took aim forcefully and without mercy at Taoiseach Enda Kenny and his predecessor, Brian Cowen, over corporate tax. Hollande’s administration has been a good deal more sympathetic to the Irish case but fair’s fair’s, as they say.
In 2012, at the very end of the Irish bailout – remember that? – Noonan was asked whether it was indecent or immoderate for Paris to come down so heavily on Dublin at the outset of the rescue. “We don’t hold a grudge but we remember,” Noonan said back then. When it was pointed out that there was an attack from Berlin as well, he noted that it was “not at the same high level”.
