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European Commission supports Ireland's bailout interest rate cut: Hayes

The junior minister said more work must be done to ensure a bailout rate cut, but said the Commission is on side.

Image: Eamonn Farrell/Photocall Ireland

JUNIOR MINISTER AT the Department of Finance Brian Hayes has said the European Commission agrees that Ireland should get a one per cent reduction on its bailout interest rate.

Yesterday, the BBC reported that Ireland will get an interest rate reduction and added that procedures are expected to get underway next week which would help speed up the process of a rate cut.

Hayes also emphasised the government’s commitment to maintain its corporate tax levels, saying that changing that rate would be crazy “at a time when this country wants to retain every single one of the 1.8m people at work”.

Since Enda Kenny went to that first EU summit and had a spat with Sarkozy, the government has defended its corporation tax stance and consistently pushed for “the reduction that the Greeks have got”, Hayes told RTÉ’s Marian Finucane Show.

He said the European Commission agrees that Ireland should get a one per cent reduction on its EU/IMF fund interest rate, but said “it’s now a political issue within the Council” [of Europe]. Ireland would have to work on a bilateral and multilateral basis to ensure the reduction comes about, Hayes added.

Hayes also denied a report today which suggests that the government will increase income tax by cutting income tax bands and credits under a plan to raise €15bn in taxes in the next budget.

A report in today’s Sunday Business Post (print edition) says that the tax band changes come under the revised EU/IMF agreement which was published last week. Changing the bands without increasing the actual tax rates would still mean people were paying more tax, in contravention of the Programme for Government’s promise to maintain current income tax rates, bands and credits.

Read: Ireland will get one per cent cut on bailout interest and keep corporation tax rate – report >


EU leaders agree Greece needs to change its bailout plan – report >

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