A REDUCTION IN the interest rate on Ireland’s bailout package may not be cut and dried, according to The Irish Times.

The paper is reporting this morning that Germany is remaining steadfast on a give and take approach to a lower interest rate, meaning that a lower rate could still come at the cost of raising Ireland’s corporate tax rate. It had been reported yesterday that concessions on corporation tax would not be made.

Ireland’s interest rate will be discussed at a meeting of EU finance ministers early next week, but these talks will likely focus heavily on the situation in Greece. The country’s debt has been downgraded by the credit rating agency Standard and Poor’s and it seems inevitable that Greece’s bailout package will need to be renegotiated. The Irish Times reports that Germany is insisting that the Irish and Greek situations are two very different matters.

Meanwhile Taoiseach Enda Kenny says that there is no question of Ireland pulling out of the EU/IMF rescue package. His comments yesterday came after economist Morgan Kelly said that the country must break free of the bailout or else face “prolonged and chaotic national bankruptcy”. The Irish Examiner quotes Enda Kenny as saying he has “no intention” of pulling out of the rescue package.

Kenny also says that while an interest rate cut is not a certainty, it is still a possibility.