Business Irish

Wednesday 24 September 2014

Colm Kelpie: We have an ally in France but promises must be kept

Published 19/01/2013 | 05:00

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PIERRE Moscovici is a self-declared lover of Ireland and the sentiment will be warmly reciprocated if he follows through on the ardent support he pledged yesterday.

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Gallic flair was on show as the Socialist Party minister seemed keen to make clear France's unequivocal backing for Irish efforts to ease our crippling bank debt.

Mr Moscovici and Finance Minister Michael Noonan stressed the close relationship between the two countries, and there's no doubt that France seems to be one of our closest allies in the quest to separate our legacy banking debt from the State's balance books. Perhaps the closest.

Mr Moscovici stressed yesterday that the French government was squarely behind Ireland and went as far as saying that "any kind of deal which can be reached with the troika and ECB will suit us".

The election of Francois Hollande as French president last May was a God-send for Ireland, as the relationship between the two countries had become more than a little frosty under the leadership of Nicolas Sarkozy as he waged a campaign against our controversial 12.5pc corporation tax rate.

When asked yesterday whether France still wanted Ireland to increase its corporation tax, Mr Moscovici blandly replied that the issue wasn't discussed when he met Mr Noonan and Public Expenditure and Reform Minister Brendan Howlin.

While the players have changed since Hollande replaced Sarkozy, it would be naive to assume that the issues have gone away.

France, and other European countries, have declared war on transfer pricing which is closely related to corporation tax but far more technical.

A landmark case currently before the French courts pits Mr Moscovici's government against Google and may achieve what France wanted under President Sarkozy without any political unpleasantness.

The optics would be good but it would undoubtedly be a big blow to Ireland.

But one thing at a time. The support to date for our banking debt efforts is welcome. Then again, we've had promises from the French that failed to materialise in the past. Would it be cheeky to mention the choppy waters off Bantry Bay in 1796 and the imminent arrival of thousands of French troops?

Let's hope the weather is on our side this time.

Irish Independent

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