Monday 19 March 2018

EU leaders gang up on Kenny over hike in corporation tax

Fionnan Sheahan Political Editor in Brussels

TAOISEACH Enda Kenny was ganged up on by French President Nicolas Sarkozy and German Chancellor Angela Merkel demanding a change to our corporation tax system in return for bringing down the interest rate on Ireland's bailout.

Attending his first EU summit, Mr Kenny clashed with Mr Sarkozy after the French leader described Ireland's corporation tax regime as "harmful".

But Mr Sarkozy and Ms Merkel also held a private meeting with Mr Kenny to put pressure on the Taoiseach over the corporation tax regime.

The European heavy-hitters will ease the burden of Ireland's bailout terms -- but only if the Government compromised on the corporate tax base.


Germany and France want to prevent companies from paying a lower rate of corporation tax in Ireland, without having a full operation in this country. Those two countries are offering to be flexible on the EU-IMF package if there is a concession given on corporation tax.

Mr Kenny is insisting he won't give anything away on the Irish corporation tax -- neither the rate nor the base.

Earlier, the newly appointed Taoiseach had been given a round of applause from EU leaders as he attended his first summit last night but he was still told he will have to give something in return for a deal on Ireland's bailout.

Mr Kenny asked for a reduction in the bailout interest rate when the crisis in the eurozone was discussed by the leaders of the 17 countries using the currency as Portugal edged closer to requiring a rescue package.

The Taoiseach also spoke with US President Barack Obama, who congratulated him on his election and said he looked forward to meeting him next week for the St Patrick's Day visit to the White House.

During an eight-minute conversation, Mr Kenny recalled how he was in Denver, Colorado, when Mr Obama was selected as the Democratic candidate for the US Presidency.

Mr Obama commented on the number of Irish-Americans on his staff in the White House. Mr Kenny also reiterated the standing invitation to Mr Obama to visit Ireland.

Mr Kenny knows many of the leaders as Fine Gael is a member of the European People's Party, which contains 15 EU prime ministers, including France's Nicolas Sarkozy, Germany's Angela Merkel and Italy's Silvio Berlusconi.

Despite the warm welcome, there was still tough talking about Ireland giving something in return for an easing of the burden of the bailout.

Finland's prime minister Mari Kiviniemi said her country was willing to renegotiate some details but she said "it will also mean Ireland has to make new commitments".

Mr Sarkozy pointed out that he had called for the special summit of eurozone leaders and said he looked forward to talking about the economic issues.

EU leaders will agree a new permanent bailout package at the end of the month, along with any changes to the terms and conditions for the funds given to Ireland and Greece.

Mr Kenny said the new Government represents "a fresh start, including in relations with Europe" and said he has "a strong mandate".

Mr Kenny spoke of the severe challenges facing Ireland, including the pain this means for Irish people, and the importance of stabilising the economy.

The Taoiseach also said the Fine Gael-Labour Party Coalition Government was committed to achieving the 3pc deficit reduction target by 2015.

Mr Kenny said a reduction in the interest rate on the EU bailout would be "an important contribution to ensuring the sustainability of our debt burden".

He also said the results of the stress tests into banks will be known soon.

Mr Kenny also expressed appreciation for the support that Ireland has got from the EU as he appealed for an agreement at the end of the month "that allows countries like Ireland get back on track and that restores confidence in the euro".

Irish Independent

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