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Dublin: 18°C Tuesday 19 October 2021

IMF to begin formal talks with Ireland

IMF delegates filter into the country for rescue package talks – but the government insists it will not bow to pressure to reduce the corporation tax rate.

Image: Peter Morrison/AP/Press Association Images

THE INTERNATIONAL MONETARY Fund will begin formal talks with the government today over the shape of a rescue package for Ireland, which looks set to run into tens of billions of euro.

As the remaining IMF delegates arrive in Dublin today, discussions will take place about exactly what help is needed – and what the price of that help will be.

The Central Bank Governor Patrick Honohan said yesterday that Ireland would be forced to accept a “very substantial” loan – however the Taoiseach Brian Cowen has said that discussions need to take place before he could give any view on the size of the package.

The Minister for Finance Brian Lenihan insisted that the IMF would not be dictating the budget and four-year plan.

Meanwhile, fears that a package would put Ireland’s 12.5 per cent corporation tax in danger were dismissed by the Táiniste Mary Coughlan, who said that the tax rate was “non-negotiable”.

But despite the government’s stern insistence that the rate will not be touched French, Austrian and German officials are reportedly keen for Ireland to alter it as part of any deal, viewing the country’s relatively low corporation tax rate as unfair competition. The Financial Times on Friday reported a French official describing the attitude towards Ireland’s tax rate as “almost predatory”.

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The Independent warns that thousands of public sector workers are at risk of job losses and pay cuts as a result of the package – with budget cuts of at least €15 billion to be imposed over the next four years.

Meanwhile, the taoiseach has insisted there was no reason for anyone “to feel ashamed or humiliated at all” in seeking help from the IMF, the Star reports. He added that the arrival of the IMF and the ECB in Ireland did not mark a loss of national sovereignty - saying that the shape of any package will be “a sovereign decision”.

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