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Did Sarky Turn Tables On Tax?

Posted on: July 29th, 2008

AN engaging little man dropped into the French Embassy last Monday. Some small men exude an instant presence. Charlie Haughey and Napoleon come to mind. Nicolas Sarkozy had none. Initially, at least. But he could grow on you.

The pre-Sarkozy coffee, croissants and cakes session was more enlightening than the message from the President of France. We Irish were all treated to tea and French pastries in the salon. Cosy groups formed. Gerry Adams entered into a little huddle with Finian McGrath. Patricia McKenna was deep in conversation with Andy Storey of Afri and Richard Boyd Barrett . There was a chasm of contact between the ‘Yes’ and ‘No’ camps.

Suddenly I spotted the duo of my dreams. There they were, joined at the hip, deep in comfortable conversation, chummy as Noddy and Big Ears. Turlough O’Sullivan of IBEC was nodding frantically. Bearded trade union boss David Begg was pontificating. The two social partners had eyes and ears only for each other. The old allies were probably cooking up another stunt for their phoney war at the current pay talks. During the long wait for Sarkozy, they chatted to almost no one else. Late relief arrived in the shape of another social partner, Padraig Walshe of the Irish Farmers Association. The club of three circled the wagons. Only lobbyist Alan Dukes tried to muscle in.

Alan need not have bothered. Sarkozy will give him a gig as a lobbyist any day. Later, at our rendez-vous with Sarky, he was keen to prove his Francophile credentials. Alan spurned the translation earphones and even uttered his one minute of wisdom in French. As always, Alan was the cleverest boy in the class. Better educated than the rest of us, he sounded as if he was making a job application.

Alan knows everything. He interpreted Sarkozy’s words on the danger to our Irish corporate tax base as benignly as Carla might do in one of her softer moments. Alan seemed as starry-eyed about Sarky as Carla.

Later on RTE, he and I locked horns on tax. Our interpretations of Sarky’s words differed. Alan put me down in his usual endearing way. Afterwards, when I asked one of Sarkozy’s flunkeys if French tax policy had changed, he emphatically replied: “Non.” Alan’s French may not be quite as good as he thinks.

On the ‘Yes’ side, Pat Cox probably carried the most clout. He was a measured ‘Yes’ supporter but he counselled caution. Billy Timmins came a close second.

No one changed their minds.

Nicolas S was intent on a charm offensive. And when he is smiling he is at his most lethal. When seated he looks like — and sounds like — the president of a powerful nation. He happily mixes it — he interrupted me twice. And with a startling lack of French chivalry, he even interrupted Patricia McKenna to remind her that while she had lost her seat, he had been elected.

He made no comment on most of the ‘Yes’ presentations, politely taking more time with opponents of Lisbon. When Dick Roche and Joe Costelloe started he looked so bored that we expected him to turn to the texts on his mobile for diversion (an impolite little habit he developed when being blessed by Pope Benedict). No one could blame him. Joe can bore for Ireland. He should represent us in Beijing.

Sarkozy lit up when Padraig Walshe took a well-aimed swipe at the damage that his bete noir Peter Mandelson poses to French and Irish farmers.

The French President volunteered that he had invited Mandy to dinner. “He had such a knotted stomach he could not come,” declared Sarky, erupting into laughter at his own wit — in unison with his Foreign Affairs Minister, Bernard Kouchner. Both French visitors slapped each other’s backs in approval of the President’s jibes at the UK commissioner.

Kouchner, the man who threatened that Ireland would be the first victim of any ‘No’ vote, wisely chuckles loudly at his President’s jokes. A good survival strategy.

Turlough O’Sullivan did what IBEC does best: absolutely nothing, while agreeing with the most powerful person in the room. He started with a howler: “I represent Irish business.” Michael O’Leary, Paddy Power and thousands of members of ISME — the authentic voice of Irish small business — were not there to distance themselves.

Turlough, the puppet of the big banks and the semi-states, represents none of them. His job is to nod. Turlough is now the national nodder. His head is in danger of falling off before the end of the partnership talks, although his neck muscles must be strong as an ox after years of practice. The President was unimpressed, not even honouring the poor sod with a reply.

Nor did Turlough represent another businessman, Declan Ganley, who made the most focused speech for the ‘No’ side. Ganley limited himself to four points. Lisbon is dead. A new referendum would be undemocratic. Europe has been a beacon of peace since World War Two and it is run by a lofty elite. All in three minutes.

Sarkozy agreed with much of this. Suddenly he took off on a tangent and proposed an ‘Open Debate Day’ in Ireland and France! The French Ambassador beside him shuddered at the thought of being forced to host another diplomatic minefield.

I hate to say it, but the bearded Begg’s words far outclassed his pal Turlough’s feeble speech. He pushed hard for the charter of fundamental rights. At least he seized the moment. It is not every day that even David chews the ear off the President of Europe.

Was it all worth it? Or just a charade, a four-hour exercise to give Sarkozy cover? He can now assert that he came to Ireland and took the temperature.

Well, for me it was worthwhile. Worthwhile to be able to tell the President that the French agenda on corporation tax is a sword of Damocles hanging over the Irish economy. Worthwhile to tell him that Ireland could not weather a European tax regime that drives our multinationals out. His response was optimistic, but seemed to contradict the views of his finance minister, Christine Lagarde. Before polling day she had claimed that tax was top of the French agenda. Today she is backpedalling.

At one point, as I spoke, he interjected: “I can be just as frank as you are,” in response to an impolite criticism I made of Madame Lagarde’s views on tax. He raised my hopes when he insisted: “Your 12.5 per cent tax rate, you can keep it,” but then dashed them with the qualification that he did not want the “tax base to be different from one state to another”. Deliberately confusing or a persuasive shift?

Encouragingly, a full-frontal attack on our corporate tax base is temporarily off the agenda. The Lisbon vote has killed this threat for the coming months. But we need binding commitments. Otherwise it will hit us sideways.

Five months from now, ex-President of Europe Sarky will be confined to barracks in the Elysee with Carla. Hopefully, she will be a sufficient diversion, a distraction to stop Sarky from meddling with Ireland’s corporate taxes.