Hayes says Govt seeking 0.6% rate reduction

Wednesday 08 June 2011 22.22
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Brian Hayes - Saving of €150m per year on the remaining amount of the loans
Brian Hayes - Saving of €150m per year on the remaining amount of the loans
Taoiseach - Ireland will not change its Corporate Tax rate
Taoiseach - Ireland will not change its Corporate Tax rate

Junior Minister Brian Hayes has said the Government is looking for a 0.6% reduction in the bailout interest rate during its ongoing negotiations with the EU and the ECB.

Mr Hayes told RTÉ's Drivetime programme that this would amount to a saving of €150m per year on the remaining amount of the loans that have not yet been drawn down.

Minister for Finance Michael Noonan has insisted the Government is still fighting for an interest rate reduction on the bailout.

However, he said despite some progress, France and, to a lesser extent, Germany are preventing it.

Mr Noonan said they had convinced the EU, the IMF and the OECD, but France and Germany remain opposed and that meant they could exercise their veto at the Ecofin council.

The Minister said France wants Ireland to change its corporation tax code - both the rate and the base.

But he said the gain was so small, the Government was not willing to concede on that point.

Extra conditions 'unfair' - Kenny

Earlier, the Taoiseach said it is 'unfair' that extra conditions are being sought in return for a reduction in the interest rate on Ireland's bailout.

Enda Kenny told the Dáil that the issue is being 'allowed to drag because of national issues'.

In an apparent reference to French demands for change to our Corporate Tax rate in return for a cut in the interest rate, Mr Kenny said it was necessary for Europe to help countries who are making a serious effort to deal with their problems.

Mr Kenny again insisted that Ireland would not change its low Corporate Tax rate and would continue to push for an interest rate reduction.

Fianna Fáil leader Micheál Martin urged the Taoiseach to formally raise the issue of the interest rate reduction at this month's European Council.

Mr Martin noted that the Government was now talking about a reduction saving of only about €200m, rather than the €400m it had claimed would be saved.

Sinn Féin's Mary Lou McDonald said she was coming to the conclusion that the bailout would have run out and the Taoiseach would still be claiming it was trying to renegotiate the interest rate.

She said the issue of private debt which had been burdened on the State would have to be dealt with.

Meanwhile, Minister for Jobs, Enterprise and Innovation Richard Bruton has reiterated Ireland's position that low Corporate Tax 'is not for changing' and that it was 'a key tool' in Ireland's recovery.

He was speaking at the launch of Enterprise Ireland's 'high potential start up showcase' involving 80 Irish companies, which, he said would employ 770 people and generate over €500m in sales.