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Ireland must review EU tax powers for Covid fund to work, says Hogan

Ireland can improve its projected €3bn take from EU coronavirus aid - but it must also seriously consider giving Brussels taxing powers, EU Commissioner Phil Hogan has warned.

Mr Hogan said several member states - including Ireland - must review total opposition to EU taxation powers if the €750bn Covid-19 aid package is to work.

Mr Hogan stood over comments made in a jointly written article with EU Commission president Ursula von der Leyen in the Irish Independent. In the article they argued that a historic concession has been made allowing the commission to borrow heavily on world money markets for the first time - but this borrowing can only be repaid via new taxes paid directly to Brussels.

The Brussels tax options include a levy on big tech giants like Apple, Google, and others, which are big employers and payers of tax revenue in Ireland. Other EU revenue-raising options include a plastics tax and a carbon levy on imports from countries which have less ambitious climate-change plans.

Mr Hogan insisted he was not trying to tell the Irish government what to do. He also said that Ireland - or any other member state - cannot be coerced into conceding national tax powers reversing their long-standing positions.

"What I am saying is that we have a historic EU initiative to tackle what risks becoming the biggest economic crisis since 1929 with an aid package worth €750bn aimed at supporting the states which are worst hit. But that is going to cost money," the former Fine Gael minister said.

"I am not telling Ireland - or any member state - what they should do. I am saying that there is a menu of options there. It is a matter for all the member states which have traditionally opposed EU taxation powers to review their stance in the face of an extraordinary set of events," he added.

Mr Hogan said Ireland - and all other member states - still had an "effective veto" over EU changes on taxation. He added that whatever changes might be agreed must also be ratified by national parliaments giving a "double-lock".

Mr Hogan said it was difficult to say whether Ireland could improve its projected take from the Covid-19 fund. Under the draft unveiled in late May, Ireland was deemed to be in line for €3bn, which many described as "disappointingly low".

The updated package agreed by Taoiseach Micheál Martin last week offers the potential to improve Ireland's allocation - especially via a €5bn special Brexit-aid fund for countries worst hit.

"It's impossible to calculate what the final outcome will be. But there are a significant number of programmes which should prove very helpful for Ireland around research and development, rural funding, and a 'just transition' and this is the direction Ireland should be going," Mr Hogan added.

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