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John Drennan: Sarkozy conned TDs over Lisbon and business tax

THE growing political and diplomatic rift between Ireland and France is likely to be accentuated by the discovery of a set of notes made by Fine Gael TD Billy Timmins of a private meeting between French President Nicolas Sarkozy and top-level Irish politicians before the Lisbon II referendum.

The previously cordial relations between Ireland and France reached a new low last week as the Taoiseach indirectly accused the French of behaving in an "unfair" manner over Irish corporation tax.

In the Dail, Michael Noonan warned the French that he would not be "waltzed" into a deal where "the heart and soul" of Irish industrial policy would be dismantled for the sake of €150m.

Now a set of contemporaneous notes kept by the Fine Gael TD Billy Timmins reveals the scale of French treachery -- in particular that of their unpopular president, Nicolas Sarkozy -- in how they have dealt with Ireland over the corporation tax issue.

The notes, recently discovered by Mr Timmins, are from a private meeting at the French Embassy on July 21, 2008, between Mr Sarkozy and a select group of Irish politicians.

The meeting was called in the wake of the defeat of the first Lisbon referendum when Mr Sarkozy was on a 'charm offensive' in Ireland.

Mr Timmins, who attended in his capacity as Fine Gael's foreign affairs spokesperson, subsequently played a critical role in assuring the passing of Lisbon II.

He told the Sunday Independent that he had originally planned to ask Sarkozy about corporation tax.

However, when Shane Ross asked the question first, Timmins noted: "Sarkozy's response was so definitive, I moved on to other issues."

The Fine Gael TD's notes of the meeting state: "Ross got cast-iron assurances on tax" from Sarkozy, who also made it clear he was "against tax harmonisation".

Mr Timmins also recalled that one of the reasons the duplicitous French president gave for his opposition to harmonisation was that France, for example, might want to reduce its own internal VAT rates on industries, such as restaurants, and would like to reserve the right to do so.

Speaking on a passage in the notes where Sarkozy is quoted as saying countries could "make tax lower", Mr Timmins recalled: "Sarkozy put the issue to bed so decisively the president had even said that theoretically you could actually make the tax rate lower and cited in extremis the example of Slovenia, which had a zero per cent corporation tax rate."

The contemporaneous notes also indicate Sarkozy made it clear that on Lisbon II "the other 26 states do not want to put pressure on Ireland" and that when it came to its citizens, "Europe was for peace, democracy and prosperity!"

Speaking to the Sunday Independent, Mr Timmins expressed his regret that "France appears to be making such an issue out of our corporation tax when Mr Sarkozy, on a visit here in his capacity as the president of the EU, made it quite clear that countries would retain their own tax rate."

Mr Timmins' claims were confirmed by the Independent TD Shane Ross, who said: "I clearly remember raising the issue and Mr Sarkozy definitively saying he was not going to threaten corporation tax in any way.

"The president's stance, that he was over here to reassure, defend Irish jobs and to offer support and the consequent assurances in the new treaty were the reasons why I changed from being a No to a Yes campaigner."

He added: "I feel real regret now in having mistakenly trusted the French president's word."

Sunday Independent