Irish ready for do or die battle with Germans, French over Europe bailout terms

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Ireland's Finance Minister Michael Noonan

Photo by PA Wire/Press Association Images

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Ireland’s new Finance Minister Michael Noonan is to seek help from Europe’s smaller economies when he goes to war with France and Germany on Monday.

Noonan is preparing for the ‘mother and father’ of all political and diplomatic battles at the Eurozone Ministers meeting in the Belgian capital, Brussels, according to the Sunday Independent.

The Fine Gael deputy leader is to seek help from countries similar in size as he fights German and French resistance to Ireland’s low corporation tax.

The Irish delegation is to seek help from the likes of Belgium, Luxembourg, Holland, Hungary, Latvia and Lithuania at the meeting of Finance Ministers from the 17 states allied to the Euro.

German and French leaders Angela Merkel and Nicolas Sarkozy are adamant that Ireland must cut its low corporation tax rate of just 12.5% in return for movement on the terms of the IMF/EU bailout.

Former deputy Prime Minister and Minister for Justice Michael McDowell told the Sunday Independent that Noonan will gather support from countries opposed to the heavy handed treatment from France.

“When we are being treated badly, we should make that very clear,” said McDowell.

“But the smaller countries in Europe know full well what Sarkozy is up to. And Ireland will have friends in taking a stance against the bullying of Sarkozy.”

Respected Irish economist Colm McCarthy is adamant that EU leaders must change the terms of the Irish bail-out deal as a new debt crisis looms.

“The assumptions in the deal underlying the bank refinancing have come apart. A zombie banking system will undermine any prospect of economic recovery,” said McCarthy.

Already Luxembourg’s Prime Minister and Eurozone chief Jean-Claude Juncker has offered support to Noonan ahead of the crucial meeting.

“I’m not happy with the idea that some governments obviously find some pleasure in torturing Ireland in the meetings and outside. I don’t like this way of dealing with serious problems,” said Juncker.

Government sources have confirmed that Noonan will "exhaust all available avenues" in the make or break discussions on the bail-out.

He will also protest against an effective corporate tax rate in France of 8.1 per cent, lower than the Irish rate at the centre of the row.

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