Bailout deal is off as Noonan won't cut tax
FINANCE Minister Michael Noonan has told France they can stuff their interest rate cut if they think our corporation tax rate is up for negotiation.
In the strongest statement of intent yet, Mr Noonan has warned Nicolas Sarkozy that there is absolutely no way he will jeopardise Ireland's 12.5pc tax rate on companies.
But French officials are understood to be "digging in" and preparing to veto any deal that would help Ireland.
As a result, hopes of achieving a reduction in the interest rate charged on the EU bailout loans are fading fast.
Diplomats in Paris are insisting that they will not throw Ireland the lifeline unless our government enters negotiations on the corporate tax issue.
But a defiant Mr Noonan says that he will not be bullied for the sake of a few hundred million euro.
"Those that are opposing us and trying to force us to change our corporation tax rate, I can tell them once more today they have no negotiating position because the amounts of money are so small in relation to the adjustments we require to make, that we're going to hang out, we're not going to concede," he said.
Despite previous estimates that the rate cut would be worth up to €450m a year, Mr Noonan now says it would only be worth €150m to €200m.
The new Government had been expected to secure a rate cut at a meeting of EU finance ministers this month but sources now say that is highly unlikely. Mr Noonan told the Dail that "too much" was being made of the possible reduction in the interest rate charged on the €85bn bailout.
The Greek crisis remains the focus of the EU bodies who are trying to restore credibility to the eurozone.
In Strasbourg, European Commission president Manuel Jose Barroso warned that the Greek crisis may prevent Ireland from returning to the bond markets next year as planned.
Fianna Fail public spending spokesman Michael McGrath said the minister had given the clearest signal yet that the interest rate cut was "now as far away as ever".
Irish 10-year bonds widened as the comments stoked concern over the debt crisis.