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Ireland must resist attempts by Brussels to assume more tax powers, the German chancellor is set to tell Taoiseach Micheál Martin.
Friedrich Merz, the embattled leader of Germany’s Christian Democrat-led government, landed in Dublin on July 28 in an effort to petition Martin against implementing French-backed tax reforms desired by Eurocrats.
Under the proposed changes supported by Paris and Brussels, the EU will gain the ability to directly tax American tech companies and other large firms in an effort to help fund the bloc, something Merz believes will fundamentally jeopardise European competitiveness.
Merz also wants Ireland to push for an estimated €400 billion reduction in EU spending for the bloc’s next multiannual budget.
While this demand from the chancellor has not proven popular with his pro-EU peers, Merz is warning that the reduction is needed to assuage European voters, many of whom are increasingly voting for the Eurosceptic right.
The German leader is feeling the pressure more than most of his peers, with his party polling around 6 percentage points lower than the right-wing Alternative for Germany (AfD).
Allies of the chancellor are also reportedly pushing the line in Brussels that a failure to come up with an EU budget deal during the Irish European Council presidency will put the entire bloc at risk, as France could have Marine Le Pen as president before they get to take another stab at agreeing a new financial framework.
Merz may not survive in the chancellor role long enough to experience this problem first-hand, however, with members of his Christian Democratic Union party in open revolt over a botched cabinet reshuffle earlier this month.
Some members of his party are also using the failure of the party’s “firewall” policy against working with the AfD as justification for an anti-Merz push, saying that the CDU must begin working with the right-wing group if it wants to serve its voter base.
“Anyone who still talks about firewalls hasn’t recognised the signs of the times,” Michael Kretschmer, the CDU minister-president of Saxony and a former Merz ally, said.
“We need to talk to anyone who wants to talk.”
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