The European Union doesn’t want to get “stuck in the middle” of a dispute between the US and China and should take a more unified stance toward the competition between the two powers, according to Ireland’s Prime Minister.
(Bloomberg) — The European Union doesn’t want to get “stuck in the middle” of a dispute between the US and China and should take a more unified stance toward the competition between the two powers, according to Ireland’s Prime Minister.
Speaking on Thursday at the Bloomberg New Economy Gateway Europe event near Dublin, Leo Varadkar said that member states don’t have a coherent view “to the extent that we should” of the “emerging competition,” and that further discussions are needed.
At the same time, he stated that Chinese investment was “welcome” in Ireland and called trade with the country “very important.”
“We don’t want to enter into any sort of political conflict with China,” Varadkar said. “They’re a competitor, they’re also a partner.”
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While his government has announced that it will examine the country’s long-standing military neutrality and defense arrangements, Varadkar clarified that it was “certainly not the intention or plan” for Ireland to become part of any military alliance, including NATO.
Varadkar also addressed the Irish government’s recent statement about surging corporate tax income, which is expected to help the country widen its budget surplus to €10 billion ($11 billion) this year and to €16.2 billion in 2024. Some of that windfall, which will amount to billions of euros, will be channeled into a reserve fund.
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The reserve fund is intended to help pay for future cost increases and avoid budget cuts during downturn. Varadkar noted that it could help Ireland avoid the kinds of spending cuts and tax hikes the country faced following the 2008 financial crisis.
“What we’re not building up is a rainy day fund, what we’re building up is an anti-austerity fund,” he said.
While the government has repeatedly warned that these funds cannot be relied upon in the future, an estimated €12 billion in current corporation tax revenue has been categorized as “windfall,” the Irish Premier said.
A planned overhaul of global tax rules could, however, put a dent in this model.
Varadkar also said Ireland was not a tax haven nor did it want to be perceived as one. As such, it has changed its own domestic tax rules over the years.
“We closed a lot of loopholes that existed. We’re now increasing our rates and every time we seem to do it, more money comes in,” he said.
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