The EU Commissioner for Competition, Margrethe Vestager, delivered a speech in Trinity yesterday on the current state of the Union, as well as the challenges facing the EU 27, sans Britain, in the years to come. Praising the “no-nonsense, ‘we’ll deal with this’ approach,” of the Irish government, Commissioner Vestager emphasised that, though Ireland faces the most immediate consequences of the UK’s withdrawal, the country will not be left alone by its fellow member-states.
The Commissioner, speaking before the college’s Historical Society upon being awarded the Gold Medal for Discourse, was bullish on the current health of the EU and its mission of liberal democracy, despite the recent wave of right-wing nationalism and Euroscepticism which has carried elections in Poland, Hungary and Austria. Calling modern-day Europe the best place to live in humanity’s history, Vestager highlighted the importance of each individual feeling as though they belong in the success of the European project. This sentiment must apply also to migrants entering the Union, she said, describing the “human-to-human need to protect those forced to flee”.
With France and Germany this week renewing their post-war cooperation pact, fresh concerns have been raised regarding the power of the Franco-German alliance at the heart of the EU. It was one year ago this week that Taoiseach Leo Varadkar told the World Economic Forum conference in Davos that “we don’t want to see meetings in Paris and Berlin that only countries with more than 40 million people are invited to attend, and the smaller countries being told afterwards what’s good for Europe”.
“I think it’s important that that dynamic is complimented with also smaller member states coming together and sharing views.”
Speaking to Trinity News following her speech, Commissioner Vestager was asked whether smaller nations such as Ireland and her native Denmark should be concerned about the loss of Britain’s voice in European negotiations, as a balancing force to this Franco-German alliance.
“Since it cannot be any different, I think it’s important for smaller countries to see this as an opportunity to work more with each other,” said the Commissioner. “I think it’s very important that we have the French-German alliance, because that has been part of the vehicle and the dynamics in Europe from the very start, but I think it’s important that that dynamic is complimented with also smaller member states coming together and sharing views, discussing positions, and I think that maybe, since it can’t be any different, when the UK is taken out of the equation, that actually leaves more space for smaller member states to do exactly that.”
Despite the assurances of solidarity with Ireland post-Brexit, relations between it and the EU have been somewhat strained in recent times. At the same Davos summit which heard the Taoiseach’s concerns last January, Ireland was accused of stealing revenue and jobs from its European partners in regard to the country’s controversial corporation tax rate. It was Commissioner Vestager whose ruling compelled the Irish government to recover over €13 billion from tech giant Apple due to unfair tax incentives, a ruling which was appealed both by the company and the Irish government. Despite these disagreements, the Commissioner is eager to focus on the progress which has since been made, and would not be drawn on whether Ireland had been guilty of a moral failing, with regard to its undercutting of its European partners.
“Well the tricky thing here is that if you make it a moral question then actually it becomes more difficult to deal with,” she said. “We deal with it in a much more sort of straightforward way; [which is] to say, ‘Well the very basics of corporate taxation is that taxes should be paid where profits are generated.’”
“Well the tricky thing here is that if you make it a moral question then actually it becomes more difficult to deal with.”
“Then of course the challenge is to understand how value is created in a digital world, and this is why we are trying to update the corporate tax system, to understand how value is created in a digital world, and what is a taxable presence in a digital world, and that of course we have to push. That being said, I think it’s a good thing; for instance for me as a customer, I appreciate doing my business with a company that I know contributes to the society where they do their business. So I think we still have some way to go, but the thing is that now we can continue on the results that we have achieved.”
Those results have been encouraging to the Commission and have lead to a belief that the tide has been turned, with progress being made towards a more fair and widespread distribution of taxation. “I have my individual cases,” continued the Commissioner, “where a business or a group of businesses have been given a selective advantage, so unpaid taxes are being paid, but also member states themselves are changing. Ireland is doing away now with the double-Irish model, a number of laws have been changed, the same thing in Luxembourg, in the Netherlands, in Malta, in Cyprus, and, at the EU level, there’s been unanimity to prevent profits from being shifted, tax bases being eroded; loopholes have been closed [and] information is now being exchanged at a completely different level than just five years ago. I think for me the direction is right, I may be a little bit impatient at the speed, but if the direction is right then I think we’ll get there.”
“Whether it is publically-driven or privately-driven may not be the important thing.”
Turning to more local issues, Vestager was asked for her opinion on the controversial recent decision by the government to sell off 10% of Dublin Bus routes, and whether this would be likely to negatively affect those who use the service, as has been seen in the UK with the widespread privatisation of public transport networks. The Commissioner was optimistic on the question, provided that the government was active in their oversight and not merely seeking to cash in on the sale.
“What we see is that if services that everyone needs, that are essential, if they can be regulated, then whether it is publically-driven or privately-driven may not be the important thing.
Then it’s the way that regulation has come together that is the important thing. If you put a cap on how prices increase, if you put an obligation on how the services should be provided by the provider, then sometimes you get a benefit from having a private provider whose expertise may be in transportation. But the key here is, of course, can you regulate it to actually serve this purpose or not? And that would in general be the question for the politicians, and not necessarily just the ownership, because in my line of work actually we’re neutral on ownership: you can have publically-owned or privately-owned businesses, what’s important is that you are willing to compete in our social market economy.”
Though ensuring the presence of competition is central to her role within the EU, the message Commissioner Vestager most wished to communicate was one of cooperation. “Politics is not about heroes and villains,” she told the assembled crowd in Regent House, “it’s about people who engage.” Citing the circa 40% turnout rate for European elections, the Commissioner called on those present to be active in shaping Europe’s shared future. After all, she closed, “we’re all in it together.”