German business stands unwaveringly behind the backstop and will not support “any sort of expiry date” attached to it, the country’s top business leader has said.
Joachim Lang, the head of the Federation of German Industries (BDI), said the backstop provision in the existing Brexit withdrawal agreement was essential to protect the single market and - more importantly - the Belfast Agreement.
“Despite all noise, all the time pressure, and all the immense challenges for businesses” this stance would not change, he told an event hosted by the Institute for International and European Affairs (IIEA) in Dublin.
There have been fears in Dublin that German industry, particularly the carmakers, would push for the backstop provision to prevent a hard border in Ireland to be watered down to facilitate a deal.
However, Mr Lang insisted the BDI had a fundamental interest in keeping the EU’s external borders permanently safe.
“This includes the enforcement of customs and single market rules. A policy that lets goods and services flow into our market without any checks will put the level playing field at risk,” he said.
“Until we have found a solution for a permanent border regime, we need an insurance policy. In other words, we need the backstop,” he said.
“And we reject any sort of expiry date. It would drive the idea of an insurance policy ad absurdum,” Mr Lang said.
UK prime minister Boris Johnson says he is committed to taking Britain out of the EU by the deadline of October 31st, whether or not he can get a deal with Brussels, raising the prospect of a crash-out Brexit, which is expected to trigger a downturn in Europe.
Mr Lang warned Europe would find itself in recession next year if a hard Brexit takes place and in a slow-growth situation if it can be avoided.
He said any type of border checks between Ireland and the continent were clearly undesirable.
However, he said establishing separate rule books in one single market would create a double standard. “It is of utmost importance to the EU as a whole that ‘Made in EU’ is globally recognised,” he said.
Mr Lang also warned that moves to a more co-ordinated system of corporate tax in Europe, seen as an anthema to Ireland, were almost inevitable.
He said multinational tax evasion was fuelling anti-establishment populism across the EU and forcing member states such as France to act unilaterly.
France has passed legislation for a 3 per cent tax on the revenues that companies earn from providing digital services to French users.
“If we do not want to see more of these national answers to tax evasion we need to come to a European conclusion,” he said.
The European Commission's proposed Consolidated Common Corporate Tax Base (CCCTB), which would see large firms pay corporation tax proportionate to where their sales, staff and headquarters are located, is expected to wipe out half of Ireland's €10 billion corporate tax base, and is vehemently opposed by the Irish Government.
