A joint Franco-German paper will be presented to the Convention on the Future of Europe, which is drawing up a new draft EU treaty, proposing moves to harmonize taxes according to the lead story in the Financial Times on Monday.
Justice Minister Michael McDowell said he believed “passionately” that tax harmonization would be more damaging than helpful to EU economic development.
“Far from being a worthy ambition, I believe it is a very serious threat to the capacity of the Union to remain competitive with the world economy,” he said.
McDowell said nobody was seriously suggesting it would lead to lower taxes.
Harmonization would “impose a deeply damaging uniformity on an internal basis which would gravely weaken the external competitive of the EU in a globalizing economy.
“The real and fundamental interests of the EU could be fatally undermined by tax harmonization proposals.”
Foreign Minister Brian Cowen said Ireland opposed harmonization when the Nice Treaty on EU enlargement was being negotiated and he stressed that the country had a veto on any change.
“Treaty changes require unanimity,” he said. “The Irish government has been very clear on where we stand.
“There is no change in our position regardless of what proposals are made from anywhere.”
In addition to Ireland, the move to harmonize taxes is also strongly opposed by Britain and Sweden.
Some EU governments have objected to Ireland’s low tax rate that is aimed at attracting foreign industrial investment, particularly from the U.S., to create jobs.