In debates about voting for the Lisbon Treaty, article 116 Article 116 was barely mentioned and the sovereignty of EU states over taxation was supposedly unchanged. Yet Article 116 basically only requires a vote of the European Parliament to challenge taxation that allegedly distorts markets.
Yesterday in an interview on Pat Kenny's Newstalk show, a europhile observer said that times move on and,as if sovereignty over taxation were trivial, he expected Ireland to cave in to pressure from France and Germany on our low corporate tax rate now that support for our position from UK is gone with Brexit. Kenny thought that small countries would back us. But most of them don't need low corporate tax rates given the competitive advantage of extremely low labour costs in central and eastern Europe and of indigeneous entrepreneurs and companies in western Europe.
The loss of control of corporate tax rates would be a major blow to national sovereignty and maybe a bridge too far towards a federal European state. It would also call for a thorough revision of Irish governmnt policies and strategies to compensate for the likely reduction in inward investment from multinationals.
An emphasis on encouraging indigeneous entrepreneurs and attracting foreign entrepreneurs would help. Increased government funding for venture capital in partnership with private companies, tax breaks and small grants for startups and offering residency to foreign investors who start businesses are proven measures internationally.
In addition,the education system needs to turn out more STEM graduates, which requires recruitment of more science and maths teachers in schools. To pay them competitively with pay in industry, many would have to be paid a premium over average teachers' pay. Trade union resistance would likely prevent that, however. Another barrier to entry is the prolonged two years postgraduate teachers' training degree for secondary teachers which was raised from one year to please unions.