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Corporation tax hike not on cards – Kenny

GERMAN Chancellor Angela Merkel wants to highlight Ireland being the first EU country to emerge from a bailout as a positive example to the rest of Europe.

But Taoiseach Enda Kenny said the Government would not bow to Ms Merkel's prospective coalition partners' demands to increase Ireland's corporation tax rate.

Mr Kenny announced the country will formally exit the bailout on December 15. The date is expected to be marked by a formal event in Dublin, yet to be decided upon.

But it is also understood that EU leaders want to herald the development.

The troika will leave Ireland on December 15 – just over three years after the European Union, International Monetary Fund (IMF) and European Central Bank (ECB) stepped in with a €64bn bailout package.

The agreement with the EU ends on December 7 and the IMF deal finishes on December 15.

It is understood that Mr Kenny and Ms Merkel have discussed Ireland's exit from the bailout.

Mr Kenny spoke to Ms Merkel – who is believed to regard the exit as a positive example for the rest of Europe – after her re-election last month.

"It sends out a very good signal in the EU for Ireland to exit the bailout," a source close to Mr Kenny said.

But Ms Merkel's prospective coalition partners want Ireland's low corporation tax raised as the price for funds for the banks from the new EU recapitalisation fund.

Mr Kenny said Germany was supportive of Ireland. But he added: "We have no intention of changing our corporate tax rate."

Mr Kenny said Ms Merkel believed that Ireland exiting bailout was important for Europe. He also said it was "too early to say" if a precautionary credit line would be needed post-bailout.

Mr Kenny said the Government wanted to ensure that when the country exits the bailout "we put up the shutters behind us".

He also said the Government would produce a post-bailout economic plan later this year, in tandem with the country regaining its economic sovereignty.

"To plan for that new era, we will publish a new medium-term economic strategy before the end of the year," Mr Kenny said.

"The economic emergency will be over. But the exit from the bailout is not an end in itself. In fact it's just the beginning.

"The beginning of our freedom to choose the kind of Ireland we want to build."

Mr Kenny told the Fine Gael national conference in Limerick: "Tonight I can confirm that Ireland is on track to exit the EU/IMF bailout on December 15. And we won't go back."

But he warned: "It won't mean that our financial troubles are over . . . there are still fragile times ahead.

"There's still a long way to go. But at last, the era of the bailout will be no more," he said.

Irish Independent