It may seem peculiar to those who are but dimly aware of the weird and wonderful ways of the European Union that Ireland is the proud possessor of a veto on matters of taxation and that taxation is still an issue over which we remain sovereign. In theory, at least.
Yet, in truth, we seem to spend much time awaiting rulings from the Commission on aspects of our national tax system. Yesterday the Commission again exercised its power over the small but significant issue of rent and rates allowances to businesses in the International Financial Services Centre.
Do not be fooled. Even if the press release said, "Commission . . . declares aid compatible with the common market" - as one said of our corporation tax regime - the approval followed intense negotiations over months and the substantial amendment of the said regime by the Minister for Finance. Indeed, in both cases the Commission's logic is much the same. By favouring one geographical or industrial sector with special rent and rates relief, or with a more favourable corporation tax regime, the member-state is creating an unfair commercial advantage.
Such implicit subsidies, in these cases in the guise of taxes, are nothing less than "state aids" whose malign influence - currently some €37 billion a year throughout the Union - the Commission is duty-bound to root out.
The Treaty of Rome not only obliges member-states to inform the Commission of subsidies granted to enterprises, the obligation goes an important step further and makes the award of aid subject to prior approval by the Commission.
The Commission is not only entrusted with the day-to-day application of the state aid rules but is empowered to develop the Community's state aid control policy. That does not mean a total ban on state aids but an increasingly rigorous set of rules. Ireland may continue to fund up to 40 per cent of capital investment in western and Border counties, with small and medium sized enterprises (SMEs) able to receive up to 15 per cent more.
Day-to-day "operational" aid, which aims at cutting running costs, is completely banned. Rent and rates relief falls under this category.
Ireland is not alone in facing such aid maps or such scrutiny. Indeed, although some of the loudest complaints within the Union have been about our tax regimes, the Commission acknowledges in its seventh annual state aids survey that "aid per capita employed tends to be higher in the more prosperous member-states ". For some time Ireland has been positioning itself to end its dependency on special regimes, particularly in corporation tax. Determined, however, not to lose the competitive edge that they have given, we have negotiated with the Commission to bring general rates down to the level of the most generous - which is easy if you have the sort of buoyant revenues that are envied by our neighbours.
In truth, the Commission's role of increasingly militant policeman of the fiscal discriminators rather suits the Celtic Tiger, although, as happened yesterday, it may cause us some temporary grief. Take the much-feared Primarola report on the operation of the code of conduct on harmful corporate tax competition (now held up by a quite separate row on savings tax). Primarola was set up to police a voluntary agreement on corporate tax that urges an end to discrimination between regions and sectors within member-states.
It focuses on 66 "harmful" regimes throughout the EU. The list names six Irish schemes, but the report acknowledges that five of them are already in transition under the agreement with the Commission for phasing to a standard rate of corporation tax by 2005. We're in the clear. Others, notably the Dutch with nine targeted regimes, will sweat as the member-states decide what to do about the miscreants.
The Commission has been playing a clever strategic game with the long view in mind.
No point in taking the Irish on head-on and prompting vetoes or references to the European Court of Justice. Instead, by negotiating a short period of transition, at the end of which the anomalies are removed, the Competition and Internal Market Commissioners, Mr Mario Monti and Mr Frits Bolkestein, set new precedents for use with others. They keep the tax harmonisation bandwagon rolling forward gently, gradually even enlisting the Irish into the ranks of the righteous.
In reality, real fiscal independence - and that veto - is going the way of other aspects of our economic management in this interdependent EU. No policy stands apart from others - taxation impinges on competition and the single market, so the Monti/Bolkestein steamroller levels the playing field. EU economic governance is emerging day by day, the product of such pressures and of the peer pressure of economic co-ordination between the euro-11.
Watch this space. No matter what Mr McCreevy may say about our right to determine our own general tax levels, be sure that when the Irish economy next comes up for scrutiny at the euro-11, there will be mutterings about the inflationary tendencies in his Budget. A case of one for all and all for one.
Patrick Smyth can be contacted at psmyth@irish-times.ie