EU big guns warned corporation tax is 'red line' in Brexit talks
The EU's heavyhitters are being warned any attempt to hit Ireland's low corporation tax will result in our country also leaving the union.
The country's 12.5pc tax rate on business profits is under renewed threat in the wake of Britain's decision to leave the European Union.
There are fears at Government level that larger EU members will again try to clamp down on our rate, which undercuts them in attracting foreign investment and jobs. Britain has been our strongest ally in the face of perennial demands for more harmonisation of tax across Europe.
A senior Fine Gael figure says corporation tax is an "absolute red-line issue".
Fine Gael MEP Brian Hayes, who ran Taoiseach Enda Kenny's re-election campaign, told the Irish Independent that if corporation tax rates are threatened then Ireland should follow Britain out of the EU.
"That is the absolute red line issue. If any attempt is made to cajole us, as far as I'm concerned, we're out the door," he said.
Public Expenditure Minister Paschal Donohoe said Ireland will now look to other countries who have similar tax regimes to our own to fend off any fresh moves from Germany.
"Even though the UK will be leaving, the rationale for our corporation tax regime hasn't changed.
"We've always been very clear that we have this particular system in place, which is transparent to offset other disadvantages that our economy has, not least of the fact that we are a small, open economy but not part of the continent of Europe," he said.
Meanwhile, the fallout from Britain's vote to leave the EU has hit the British Labour Party, which is in revolt against party leader Jeremy Corbyn.
More than a quarter of Labour's shadow cabinet has resigned in protest at the party's weak role in the referendum.
In Scotland, First Minister Nicola Sturgeon is already planning for a second independence referendum after her country voted to remain in the EU. Taoiseach Enda Kenny will meet with his EU counterparts in Brussels tomorrow to discuss the crisis. With sterling expected to fall this morning, British Chancellor George Osborne will try to calm the markets.