The Irish Are A Stubborn People

Angela Merkel and Nicolas Sarkozy were thinking that they had Ireland by the short hairs and finally, finally, they'd have their way.

For a very long time, Germany and France have been more than irked at Ireland's refusal to raise its corporate tax rate. Anyone can see that Ireland attracts shadow businesses that are set up to avoid the higher tax rates in their home countries, and it's that source of income that fueled the Celtic Tiger.

It's that source of income that Ireland is counting on to recover from the recent economic meltdown. Germany and France, however, are competing with Ireland for those same tax dollars.

While they could lower their rates and compete at that level, they insist that Ireland raise its corporate tax rate up to meet theirs. They wish to level the playing field to meet their pitch, rather than sloping down to join Ireland.

Now that Ireland's gone to the EU, hat in hand, the member nations who would like to force a change in Ireland's tax rates figure they can make a deal. Boost the Irish rate up to meet that of the over-taxing EU nations, and the interest rate on Ireland's bailout loan will drop by 1%.

No small beer, considering how much money Ireland will be borrowing. Enda Kenny, the newest taoiseach on the block, says no.

Attracting foreign investment is the key to Ireland's future. Siphoning off those investors and bringing them into France or Germany is their particular dream, a way to stop money from running off-shore to tax shelters like Ireland. So what if it kills Ireland? France and Germany are only look out for their own interests, and if they have the power to take what they want, they won't hesitate to turn the screws.

The Irish, however, are a stubborn people and the lackluster, bland as dry toast Mr. Kenny is not going to budge. In the long run, Ireland is better off to keep its tax shelter status and find a way to pay blood money to the EU.

Foreign investment brought Ireland out of poverty. Give it away to France or Germany and it's not unlike the soupers of the Famine, selling their souls for a meal. After it's been digested, it's gone and what do you sell the next time, and the next time?