Due to the stability of the state’s economic profile, there is very little risk of Ireland being infected by the UK financial crisis, said European Commission Executive Vice-President Margrethe Vestager in Dublin.
Sterling fell to record lows this week, while UK government bonds suffered heavy losses, fueling expectations of an emergency hike in UK interest rates following last week’s tax cut package by UK Chancellor Kwasi Kwarting.
Speaking at an event hosted by the Institute for International and European Affairs on Friday, Ms Vestager said there were “really interesting” differences between the way Ireland and the UK are coping in “such difficult times”. It’s really interesting to see the differences. Here you have an island with a budget surplus, with a budget that has just been proposed – I understand that it is welcomed positively because of its social profile, given the crisis that many families are going through – with growth, very low unemployment.
“In a very troubled time, Ireland has stability. Therefore, the risk of infection is very low. From what we’ve seen in the UK, that seems very specific to the UK. This is of course a lesson. When you have that stability, the risk of contagion is so much lower.”
She attributed this stability in part to the existence of the euro as a currency.
“Markets have trust. Of course, things are a bit shakier than they were a few months ago, but imagine if every country had its own currency. The turbulence would be so big, so we should have a number of fundamentals to thank for the situation we’re in,” she said.
The commissioner, who led the prosecution of the Apple tax case, also said she encountered no resentment over the issue at their meetings in Dublin.
Ms Vestager met Taoiseach Micheál Martin, Tánaiste Leo Varadkar and Finance Minister Paschal Donohoe and stressed that the hospitality shown was “even better” than at the Commission’s Berlaymont headquarters in Brussels.
She has previously spoken of her hope that the commission’s appeal in the Apple tax case will be successful, saying on Friday, “That hasn’t changed.”
Europe’s second highest court ruled in 2020 that Ireland had failed to provide illegal state aid to Apple, overturning an earlier European Commission decision that found the tech giant owed €13.1 billion in back taxes.
The Irish government and Apple had both appealed the Commission’s original 2016 judgment to the Luxembourg-based court. The result was a setback for Ms Vestager, who has made fighting taxes a centerpiece of her tenure. The Commission later appealed the Apple tax court ruling to the European Court of Justice.
Ms Vestager told RTÉ’s Morning Ireland that from the commission’s point of view there was “no tension” in relations on the issue and “if there’s a grudge on the other side, I haven’t felt it. But you have to ask her.”
The commissioner – who chairs the group of commissioners for a Europe fit for the digital age – said she has also been working with the government on digital matters here, saying: “Ireland is a high-level country when it comes to digitalisation.”
Ms Vestager also addressed the war in Ukraine, describing the energy crisis it has exacerbated as “absolutely unprecedented”.
“Everyone is affected [the war],” she said. “Here in this country, people have gotten new Ukrainian neighbors. Some have new Ukrainian colleagues where they work. The energy market has been armed and turned against us… we have an energy crisis that’s reaching a scale that is absolutely unprecedented. The fact that the weakest are hit the hardest is very important to recognize.”