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Strauss-Kahn's arrest will affect secret talks

THE arrest of Dominque Strauss-Kahn is likely to add confusion to the agenda for secret talks with European finance ministers, which were scheduled to take place today.

The IMF chief was due to travel to Brussels for the talks before his arrest.

The need for a new Greek bailout is at the top of the agenda, and eurozone finance ministers are also expected to officially sign off on the bailout deal for Portugal.

The packed agenda means formal discussions on cutting Ireland's interest rate have been pushed back, and Taoiseach Enda Kenny yesterday acknowledged it is unlikely to be finalised this week.

It is likely to be a topic for discussion, however, after French officials insisted last week that Ireland's 12.5pc corporate tax rate should be on the table if the cost of the loans is to fall.

But Tanaiste Eamon Gilmore yesterday warned there will be no "quid pro quo" of a hike in corporation tax for a reduction in the bailout interest rate.

"The Government has been very clear about this," Mr Gilmore said at the Labour Party James Connolly commemoration in Arbour Hill yesterday.

"We are not going to increase our 12.5pc corporation tax. Foreign direct investment is very important to creating jobs in this country and it's very important that there is certainty about Ireland's corporate tax rate among potential investors."

He also said Ireland would work though its difficulties, but this did not mean rescheduling debt payments -- lengthening the bailout payback period -- as had been mentioned by Public Expenditure Minister Brendan Howlin.

Last night Irish officials refused to comment on the Strauss-Kahn investigation, insisting Ireland has good relations with the IMF team monitoring the bailout.

A government source said: "This issue will not have implications for Ireland as we deal with the IMF as an institution."

However, the absence of Mr Strauss-Kahn could affect today's talks.