They cost us the World Cup – now the French want to scupper Ireland’s hopes out of a cut in the bail-out interest rate as well.
Irish government Minister Lucinda Creighton has admitted that French resistance is about to kill Ireland’s hopes of a reduction in the rate charged by the EU/IMF rescue package.
The ongoing row over Ireland’s corporation tax rates has prompted the French to veto any plans to renegotiate the terms of the bail-out plan.
Prime Minister Enda Kenny and his Finance Minister Michael Noonan had all but secured a reduction in the wake of Portugal’s recent bail-out on more favorable terms than the Irish deal.
But now the French have thrown a spanner in the works in protest at the Irish government’s refusal to even consider an increase in the 12.5% corporate tax rate.
Europe Minister Creighton has now admitted that it is ‘unlikely’ that Ireland will get the reduction which would have saved taxpayers almost $650million a year.
EU Finance Ministers are due to meet in Germany next week but Creighton revealed her fears after a meeting with French counterpart Laurent Wauquiez in Paris.
After the hour long meeting Creighton was critical of the opposition to Ireland’s corporate tax rate.
She said: “To take away one of the really essential pillars of our economic policy, which is critical to achieving growth, would be absolutely counter-productive, not only for Ireland, but also for the Eurozone and the EU.”
Wauquiez had accused Ireland of being engaged in ‘fiscal dumping’ at the expense of other EU countries.
The German government has also called for a review of the Irish corporate tax rate before any reduction in interest rates can be considered.
Greece, currently crippled by a national strike against austerity measures, has already secured a reduction in the terms applied to its rescue package by the EU and the IMF.
“It would be quite bizarre for Ireland to be on a different rate than Portugal and Greece,” claimed Minister Creighton.
“The Greek situation is making other member states more uncomfortable because they’re beginning to question how much it is going to require and there is concern about that.”