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Ireland seen as "bad boys and girls" after Kenny's corporation tax stand-off

Michael Noonan due to meet with EU and ECB officials today to discuss details of Ireland’s financial assistance agreement, but Ireland’s corporate tax stance not expected to be main focus.

Image: Julian Behal/PA Wire

FOLLOWING FRIDAY’S EU summit at which Enda Kenny and Nicolas Sarkozy exchanged words over Ireland’s corporate tax rate, Minister for Finance Michael Noonan is to begin talks with EU authorities over Ireland’s bailout package today.

Noonan is expected to meet with the chairman of the ECB and EU Commissioner Olli Rehn to discuss new measures which will ease the cost of the bailout to Ireland, the Examiner reports.

Bad boys and girls

Angela Merkel and Nicolas Sarkozy are reportedly not pleased with Kenny’s stance on corporate tax, but former Tánaiste Michael McDowell said at the weekend that any climbdown by Ireland on the policy would be “political and economic suicide”, the Sunday Independent reported.

Chief economist at Goodbody Stockbrokers, Dublin, Dermot O’Leary said Ireland is seen as “the bad boys and girls of the euro area” for refusing to shift its position on corporate tax. But O’Leary added: “If we agree on the corporate tax issue, we’re shooting ourselves in the foot”, Bloomberg reports.

McDowell said harmonising corporation tax rates across the EU would draw corporate activity away from Ireland towards the heart of the EU. Justice Minister Alan Shatter said yesterday that Ireland would protect its corporate tax rate at all costs.

Seventy-eight per cent of people polled by Quantum Research on Friday for the Sunday Independent said they backed Kenny’s position instead of accepting Sarkozy’s offer of more favourable bailout rates if Ireland in return for a change on our corporate tax stance.

An EU official said today’s meetings would not focus solely on the issue of Ireland’s corporate tax rate.

Have your say: Should Michael Noonan stick to his guns on the corporation tax rate? >

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