According to an article by Ann Cahill that appeared in the Irish Examiner on February 26th 2011, a list of proposals have been drawn up to improve the competitiveness of countries. Cahill writes that "Proposals that would see wage increases linked to productivity and to incomes of other trading partners are expected to land on the desks of the EU's 27 prime ministers over the weekend."
The proposals, which have been drawn up by Jose Manuel Barroso and Herman Von Rompuy in consultation with EU states includes issues such as a minimum rate for corporation tax, increasing retirement age as well as examining pensions. The reduction of interest rates for Ireland and Greece will also be discussed.
The proposals will be set as voluntary targets and it is up to individual countries wheter or not to accept these. According to the article "there will be no sanctions imposed on countries that do not meet the targets but the proposal will suggest that naming and shaming by their peers should be a sufficient incentive to improve performance." The proposals have been made following demands by Germany and France for EU countries to reduce debt and improve growth.
However, one has to wonder if these measures will improve growth in Ireland. During the Crltic Tiger Ireland experienced increased growth. Much of this growth was accredited to a low corporation tax. Any increase in the minimum rate of corporation tax will surely be a set-back for Ireland, as the 12.5% rate has traditionally been a factor which has helped to attract Foreign Direct Investment into the country.
The proposals will be discussed by eurozone leaders on March 11th and only time will tell if they will be accepted by Ireland and other EU countries.
http://www.irishexaminer.com/business/plan-to-link-wages-across-eu-states-146555.html
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