Opinion:As the events of 2006 are now history, this emerging year, particularly among the revellers, may appear to be a renewal period. Don't be deluded, writes Bill Murdoch

There will be many carry- roughs. Some, like continued strong economic growth, will have very positive impacts. Others, however, have the potential to have a distinctly negative impact. A small section of these potential negatives include the move by Brussels to harmonise taxes, the blinkered loan approach adopted by some credit unions and the consequences of Bupa Ireland's decision to leave the domestic health insurance market.

Although in the pipeline for a considerable period, the European Commission's plan to harmonise the corporate tax base in EU countries is gathering pace.

Tax commissioner Lazlo Kovacs is to publish a paper on corporate tax this year, with final policy proposals for debate by member states in 2008.

With the full backing of European Union president Jose Manuel Barroso, these moves have to be taken seriously despite the vocal opposition from several states, including Ireland. Our low corporate tax rates (and generous grants) have been the cornerstone in attracting industry.

The tax commissioner has made it clear that the EU will not be proposing tax rates but only the base. However, if the base is harmonised this will likely lead to a harmonisation of the rates themselves, a legitimate fear held by those states opposing the move.

The tax commissioner has tried to soften the fears by asking those states opposed to hold fire on their views until the proposals are published.

Nevertheless, Ireland's European commissioner Charlie McCreevy is right to criticise the plans at this stage, particularly as corporation tax rates have to be viewed together with the size of grants which are more generous in some other EU areas.

The credit unions are, of course, stuck with our increasingly unsustainable cost structures but anyone looking at their physical development in towns across the State could take either of two views.

They reflect a much higher profitability and optimism or they reflect a questionable over-expansionist policy.

With some three million members and savings of more than €12 billion, credit unions have a crucial role to play.

Worry beads rightly emerged last year when an internal report for the Irish League of Credit Unions warned that some of its members would probably go out of business because some people were not repaying their loans.

Worse than that, the report noted that a large number of credit unions were ignoring their bad debt issue or were not aware of their problem.

Being unaware must question the very maturity of these institutions.

On a somewhat more positive note, the Irish Financial Services Regulatory Authority, which regulates the credit unions, asked 26 of them to take "remedial action" to deal with the high level of bad debts in their loan books.

While the result of that directive is not known, the regulator said the examination was timely and appropriate.

What is disconcerting is the Irish League of Credit Unions' "surprise", expressed in private correspondence, that a statutory consumer panel agreed with the regulator's "tough" approach to the credit union movement.

It is essential that those charged with the regulation of credit unions should adopt a tough, though not a confrontational, approach.

With interest rates and borrowings continuing to rise, surely more vigilance is needed this year.

The surge in property prices may enhance the value of credit unions' assets, but unless the bad debt problems are effectively tackled, there is a bumpy time ahead for some credit unions.

Bumpy is probably too calm a word to describe the immediate future of our private health insurance market.

There is no doubt that Bupa's stated decision to quit the Irish market will have major consequences for the domestic health insurance market in 2007 and beyond.

Bupa had clearly warned of its intention to leave the market in the event of risk equalisation - a community rating system where there would, in effect, be a transfer of funds from Bupa to VHI because of its lower risk profile - being introduced.

Justice William McKechnie, in his draft judgment, said he found it difficult to understand in business terms how both the Irish and group boards could make such an irreversible decision and at the time they did.

Bupa made a subsequent statement that it could live with risk equalisation provided it could make a modest (never defined) profit.

Considering the time involved in its Supreme Court action, and the Government's intention to set up a study group to investigate the structure of the industry, it would be difficult to row back on the dismantling of its operations here.

Difficult, but not impossible!

Bupa customers will now have to decide to stay with the company for the duration of their contracts, join either VHI or Vivas or quit the private health insurance market - which, considering the spiralling costs, must be an increasingly valid option.

Bupa has promised there will be an orderly winding down of its business and that there will be sufficient staff left to deal with claims.

There is no doubting the loyalty of its staff, but with a redundancy hangover for those staff not absorbed elsewhere, there is the potential for difficulties to arise in settling customers' insurance claims expeditiously that will run well into 2008.