Michel Euler/AP

Sarkozy takes aim at Irish corporate tax rate

As the notion of a lower bailout rate re-emerges, Nicolas Sarkozy says we shouldn’t get cash without raising our taxes.

FRENCH PRESIDENT Nicolas Sarkozy has said Ireland “cannot continue” to ask the European Union for emergency bailout funds unless it revisits its corporate tax rate.

Bloomberg quotes the President as telling reporters in the Toulouse suburb of Blagnac, where he was visiting the factory of aircraft manufacturer Airbus, that while he had “deeply respected the independence of our Irish friends and we have done everything to help them.”

But, he said, “they [Ireland] cannot continue to ask us to come and help them while keeping a tax on company profits that is half” of that levied by other EU coutnries.

The Irish Times adds that the President outlined his vision for European’s financial “convergence”, saying the EU could not discuss “economic integration without the convergence of fiscal systems… we are going to reinforce European economic integration and we’re going to progress towards fiscal convergence.”

Though the final agreement between Ireland and the EU-IMF did not require a change to the corporate tax rate, Sarkozy – and other European leaders, including Austria’s finance minister – have advocated that Ireland raise its corporate taxes in order to fund its own operations.

Sarkozy also said that the value of the Euro was “too high” against the dollar, saying that the exchange rate was keeping French and European businesses uncompetitive.

A “0.10 point” appreciation of the Euro, the Wall Street Journal quotes him as saying, would cost Airbus about €1bn.

Labour MEP Alan Kelly has criticised Sarkozy’s comments as “both short-sighted and dangerous”, and insisted that changing the Irish corporate tax rate would “wipe out any economic progress Ireland has made, and we would remain relying on the EU forever.”