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Bruton takes on Germans over tax rate

ENTERPRISE Minister Richard Bruton has warned France and Germany to back off in the battle over our corporation tax rate.

Mr Bruton said Nicolas Sarkozy and Angela Merkel risk "putting a spoke in the wheel" of Irish economic recovery.

The minister was responding to comments by German Finance Minister Wolfgang Schauble -- who said Ireland would have to make a gesture on the tax issue if we want to secure a reduction in the cost of the €85bn bailout.

In an interview with the influential Financial Times Mr Bruton said the 12.5pc rate charged to companies here was the "best chance" the country had of meeting its debt obligations.

"It would not be in Europe's interests to throw a spoke in the wheels of such a recovery.

"We need to persuade Europe that the best chance of a strong EU with Ireland carrying out all its obligations is by Ireland having a successful export-led recovery," he said.

Mr Bruton also defended the decision of the Fine Gael-Labour Government to reverse the previous government's €1 cut to the minimum wage.

The move is likely to anger some other European countries as with a pay rate of €8.65 an hour Ireland will have the second highest minimum wage in the EU after Luxembourg.

Mr Bruton said it was "socially unacceptable to hit the most vulnerable with an 11.5pc cut in their wages when the rest of the private sector are not applying any such cuts".

Officials from the Department of Finance and an EU/IMF delegation will today announce the findings of their first quarterly review of the bailout.

They have already cut Ireland's growth prediction for 2011 to just 0.5pc.