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Noonan meets Lagarde as interest rate cut gets German backing

But will Sarkozy and France relent?

Lagarde and Noonan in Luxembourg earlier today.
Lagarde and Noonan in Luxembourg earlier today.
Image: Virginia Mayo/AP/Press Association Images

THE MINISTER FOR Finance Michael Noonan is meeting with his French counterpart Christine Lagarde at a summit of eurozone finance ministers in Luxembourg today.

As finance ministers focused on the debt crisis afflicting Greece, it is reported on the Irish Times website that Noonan and Lagarde are meeting amid hopes that the issue of getting Ireland a cut on its EU/IMF bailout interest rate can be resolved before Lagarde - the likely next head of the IMF – leaves the finance ministry in Paris.

The paper quotes source as saying that talks to cut a deal on reducing the interest Ireland have intensified in recent days as hopes remain that the matter can be concluded.

It is widely thought that the attitude of Nicolas Sarkozy will be pivotal to the prospects of a deal with the French president previously indicating that a cut would not be possible without Ireland raising its corporation tax rate.

Meanwhile, the Tánaiste Eamon Gilmore has said that Ireland has the support of Germany for a reduction on the interest rate having held talks with his German counterpart Guido Westerwelle in Luxembourg today, according to Newstalk.

Expectations that Ireland would get a one per cent cut on its interest rate have been lowered in recent weeks with the latest indications that the cut will be around 0.6 per cent, which would be worth about €150 million to the exchequer.

Read: ‘We can keep our corporation tax AND please Europe. Here’s how’ >

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About the author:

Hugh O'Connell

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