THE JUNIOR MINISTER for European Affairs, Lucinda Creighton, has said she thinks it is “unlikely” that Ireland will secure a reduction in the interest rate it pays on its bailout loans.
Speaking to RTÉ News after meeting her French counterpart in Paris, Creighton said the ongoing tumult over the Greek debt crisis – which last week triggered rumours that the country was considering leaving the Euro – meant the Irish issue was “complicated”.
“The likelihood is that the focus on Greece will take the Irish interest rate off the agenda for the time being,” Creighton said.
But RTÉ also said sources from the French finance ministry had indicated the delay in agreeing to an interest rate reduction was because Ireland was not being amenable enough to the prospect of adjusting its corporate tax rate.
This morning the Financial Times reported that Paris was holding out on demanding an increase to the corporate tax rate of 12.5 per cent before it would be willing to countenance reducing the cost of Ireland’s bailout loans.
If the Greek crisis does push the Irish rates off the agenda at next week’s summit, it will be the second time that the topic has been brushed off by other developments: a similar meeting in March became dominated by Portugal’s need for a bailout, and so Ireland’s request had to be shelved.
Adjustments to the Irish interest rate would require the unanimous consent of all EU member states. Only yesterday, European economics commissioner Olli Rehn said he “expected” a reduction of Ireland’s rate.
Last Friday it was reported by the German news magazine Der Spiegel that Greece was considering leaving the Euro entirely, such was its struggle to try and cope with its growing burden of national debt.
Leaving the Euro would allow Greece to manipulate the value of the re-instated Drachma, skewing the size of its debts – which would remain measured in Euro – and making its exports more affordable overseas.
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