The European Union is recommending that Ireland abandon its reckless fiscal policy of low taxation, arguing that it violates the Stability and Growth Pact it agreed to in joining the multinational governing body. The EU argues that Ireland encourages capital and labor flight from countries with higher taxes—a practice referred to as "tax poaching."

Ireland cut taxes in 1986 as a supply-side response to a massive and intractable government budget crisis, and has been cutting them aggressively ever since. Since 1995, Ireland's growth rate has been 9.4 percent, compared to the EU's modest 2.6 percent, and compared to its own abysmal rate of less than half a percent prior to the policy change. Government revenues from personal income taxes have increased fivefold over fifteen years. Revenues from its capital gains tax, Europe's lowest, have increased sixfold between 1993 and 1998.

[Ed.: For a strange expression of pan-European aspirations, see captaineuro.com. Or perhaps it's just a joke.]

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