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Progress on 1pc interest rate cut in Brussels - Enda Kenny

Taoiseach Enda Kenny has had a "good" meeting with French Prime Minister Nicolas Sarkozy over France's resistance to the 1pc interest rate cut on bailout loans from Europe, he said today.

He added that talks will continue on the rate as the Brussels summit continues.

He said that Ireland's reputation in Europe has been restored following the speed in which we have introduced austerity measures.

"We have restored our credibility and reputation for the implementation of the EU/IMF measures," he told reporters in the Belgian capital.

"The delay in Ireland of being awarded this reduction in the interest rate arises from a request that we increase our corporate tax rate," Mr Kenny said.

"I had a convivial meeting today with President Sarkozy... and we agreed that both teams should continue to discuss this matter."

Officials have already ruled out a deal based on Ireland committing to look at a Commission proposal for a common consolidated corporate tax base (CCCTB), a way for EU countries to share tax revenues from cross-border companies.

The CCCTB draft was published in March, but has been roundly panned by EU member states - including economic powerhouse Germany - fearful of losing money to other jurisdictions.

Ireland has already agreed to "engage constructively" in talks on the proposal, but Mr Kenny insisted that the Government maintains its "healthy scepticism" about it.

Mr Kenny also held talks with German chancellor Angela Merkel during the summit.

Germany has softened its stance on the corporate tax rate after initially backing France.

But Greece continues to dominate the talks.

Greece, the EU and the IMF have finalised a deal through which Athens has agreed €28bn in savings over the next five years.

The European Commission said the deal now has to be "translated into concrete legislative measures."

The deal includes the selling off billions of euro in state assets.

Legislation to complete the deal will be done by June 30 as part of a second bailout agreement for Greece.

Germany has led member states in an insistence that the second aid package must involve the private sector despite the concerns of credit rating agencies that they could consider this as a selective default.

But president of the European Council Herman van Rompuy said such a default would not happen.

Meanwhile, Taoiseach Enda Kenny held a brief meeting with French President Nicolas Sarkozy on the margins of the EU Summit in Brussels, which continues today.

The meeting is part of efforts to secure a lower 1pc interest rate on our €67.5bn loan bailout