A widening of the State's unique low rate of corporation tax could be a double-edged sword, Mr Feargal Quinn (Ind) warned.
He said the services sector had over the past 25 years created all the net increase in jobs in the Irish economy. This was while being burdened with a penal rate of tax compared with that of the manufacturing sector.
The strategy was now to put both services and manufacturing on a par as the EU had ruled that the State had a discriminatory tax regime. "The result is that from 2003 or whenever, every corporate entity in Ireland will be taxed at the rate of 121/2 per cent, a quarter of the rate that I have had to cope with for most of my business life and way below the lowest rate in the rest of the EU."
After 2003, it would be open to anybody doing business in the EU to relocate their business to Ireland and benefit from the uniquely low corporate tax rate.
The truth of the matter was that our unthought-out strategy would, when it was fully in place, create a stampede of companies trying to relocate in the State.
However, he did not think the EU would accept such a development. "And I believe they will punish us for having tried to make it happen. We need to rethink this strategy at a higher level of tax; one that will be acceptable to our European partners.
"The price of this may well be that we lose some of our existing inward investment. But from the long-term perspective, that may not be so serious. The sooner we get our economy on to a basis where it succeeds because of its fundamentals - not because of artificial incentives - the better we will be equipping that economy to survive and excel in the long term."