Contrast the Irish government’s reaction to the Brexit announcement with its reaction to the ruling by the European Commission that Ireland helped Apple pay almost no tax on profits it made selling its devices and services across Europe.

The morning of the Brexit result, the Taoiseach appeared before the media with a plan, a set of actions drawn up by his officials, and a sense that the government had at least thought through some of its options with respect to this enormous problem.

The Irish reaction was far, far more professional than our cousins in Perfidious Albion, where the political system essentially imploded for a month. The Taoiseach was clear, concise, and it seemed like the civil servants – the people who actually do the doing when it comes to policymaking – had thought things through.

You might think there is a world of difference between the popular referendum to leave the European Union and a fairly abstract tax ruling, but you would be wrong.

Ireland’s approach to its taxes, and particularly to the way it taxes multinationals, has been a running sore for several years. In fact, the first time Enda Kenny took his place as a head of government in a European meeting, the then French President put him into a rhetorical headlock about Ireland’s approach to corporation tax. Kenny got out of that headlock, but there is no doubt this government knew the issue of multinational taxation had to be dealt with. It required a response. The response has been happening, in a fairly low-key way. Minister Michael Noonan has been making changes to the way Ireland taxes multinationals for several years, in practice ending the route Apple took to licensing itself back bits of its intellectual property via a subsidiary registered in Ireland but not resident here. Measures to close loopholes, and Ireland’s wholehearted membership of the base erosion profit-sharing process sponsored by the OECD, show us there is a recognition at the highest levels of government that our approach to multinationals is flawed. So why the surprise last week?

In the specific case of the Apple investigation, we all knew things were not going to be rosy in the garden when the European Commissioner for Competition stood up on Tuesday morning. All indications were that Ireland and Apple were going to get whacked. The only talking point was the scale of the fine. It says a lot that nobody in official Ireland really thought the fine would be higher than a few hundred million euro.

Ireland has paid fines before to Europe – usually for environmental issues, and for Apple a fine of that scale is a day or two’s profits. So nobody was particularly exercised. The scale of the fine took everyone by surprise, fair enough, but there should have been a more coherent response from government, regardless of the result. This time there was no quick press conference, no list of things to be done, no sense that the government had things under control.

With Brexit, the strategic play was obvious: the government knew it had to side with the Europeans as most of our trade is with them, while attempting to modify our own arrangements with Britain over time and make sure the rest of Europe doesn’t come down on them too hard.

With the Apple and European Commission case, given the scale of the fine, the strategic play is much less obvious. Ireland is an enthusiastic member of the European Union. We have done very well out of our membership, even including the disastrous bank bailout and debt repayment phase of our development.

Almost every tough decision can be blamed on Europe, they give our farmers oodles of cash, and of course we now trade much more with them than with Britain. It is remarkable to hear Irish ministers taking a tough line with their European counterparts, even over something like the reputation of Ireland’s tax system.

To turn from Europe now, and work with companies like Apple to help them save many billions in taxes they rightly owe other countries, seems not just wrong, but foolish – at least at first glance. And yet Ireland will join hands with Apple and appeal the result.

On the other side of the strategic play, Ireland has spent 60 years courting multinational business. We use our highly compliant tax systems and help invent less than transparent methods for large foreign companies to pay very little tax in exchange for jobs and increased domestic demand here.

‘A nod and a wink’

This newspaper has recently broken stories about vulture funds using charitable status designations within special-purpose vehicles to pay hundreds of euro of tax on millions of euro of income. That’s in 2016. So let’s not be under any illusion that our business model is not ‘tax haven lite’. As a country, our approach to multinationals is the macroeconomic equivalent of a nod and a wink — taxes for jobs. That is who we are and that is what we do. Moving closer to the US multinational position doubles down on these issues, and increases the moral and political problems we’ll face, not to mention the legal ones.

Some citizens are outraged by Apple’s conduct as facilitated by the Irish state. Others much less so.

A poll of 5,000 people taken this week on Joe Duffy’s radio show found nearly 60 per cent wanted to hand the money back, or not appeal the result at all. Why is this? Is it because the average Irish person does not understand what’s going on? Is it because the question was posed in the wrong way? Or is it because the average Irish person is a lot smarter than we give them credit for? The rational decision is to enrich ourselves at the cost of tax revenue to other jurisdictions. It’s not pretty, and it’s definitely not right, but it works. The average person knows it has worked for 60 years.

Apple will pay between €13 billion and €19 billion to Ireland in taxes and interest it should have been paying to other countries. I buy an iPhone in Limerick, Apple pays taxes to Ireland on that purchase. I buy an iPhone in Bremen, Apple uses its structures within Ireland to pay nothing to Ireland or Germany on that transaction, because the research and development which went into making this awesome product took place in California.

But Apple’s not paying taxes in California either – yet. Next year Apple will move all of its many, many billions back onto US soil, and the US taxpayer will be much happier as a result. The move will also normalise our national accounts.

Reputational damage

Ireland’s growth figures were recently very badly distorted when Apple moved much of its formerly offshore cash onto the Irish balance sheets. That one company in one fiscal quarter can do this to a state like Ireland gives you a sense of the size of Apple but also of the scale of the kinds of tax avoidance Apple has been engaged in. The authorities here have just not been quick enough to close off these loopholes.

The fine is on the order of about one and a half Irish health systems. The Independent Alliance immediately saw their advantage. Knowing their support was crucial to an appeal, have no doubt the canny independents have extracted both the pork and the barrel for their support of a government decision to appeal the result to the European courts, where I expect Ireland and Apple to win after many expensive years.

I think everyone has the ‘reputational damage’ argument the wrong way around. If Ireland chooses, Ireland’s reputation among the bond markets of the world was solidified forevermore because it chose to impose austerity on its own people rather than renege on debts. Ireland’s reputation among tax-minimising multinationals will also be solidified by fighting tooth and nail in the interests of global financial capital.

Imagine I am the chief financial officer of a large multinational company. My job is to keep the money safe, keep the money moving, keep the money on the businesses balance sheets and not on the state’s. Five minutes after the Apple ruling, I would have expected to get a call from my chairman and my chief executive. It would be brief and go something like this: Are we exposed? If we are, sort it by moving cash out of Ireland now. If not, let’s see how this Apple case goes. I’d like to do business with these Irish guys. They’re on our team.

Other ‘Apples’?

Ireland is in a remarkable position: the European Commission is challenging both Apple and the Irish government on their behaviour. The tax collector and the taxpayer agree that they have paid the right amount. The Commission is using state aid rules to argue for retrospective taxation because it wants to create a disincentive what it sees as beggar thy neighbour policies.

Here is what I expect to happen. Ireland and Apple will appeal. That will take years and represent a perpetual Christmas morning for lawyers, economists, and other assorted parasites. Meantime, the Irish government will have to see how many other ‘Apples’ there are out there. Remember, Ireland is European headquarters to pharmaceutical and tech giants. They might all be here for the craic and the Aran jumpers. They might not. We’d better find out before Commissioner Vestager gets bored of Apple and decides to take a pop at another multinational.