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Kenny hints at revised bailout

Finance chiefs are close to striking a deal on an interest rate cut for Ireland's multibillion bailout loans, Taoiseach Enda Kenny has claimed.

At a meeting of European leaders in Brussels and with the Greek economic crisis dominating the agenda, Mr Kenny hinted at progress on negotiations for a cheaper rescue package.

Finance minister Michael Noonan has singled out the French Government for standing in the way of a revised bailout arrangement.

But the Taoiseach was adamant the 12.5pc corporation tax rate - a bugbear of France and Germany - was not on the talks table.

"I made it crystal clear to the meeting and I make it clear again here there will be no shift from Ireland in respect of Ireland corporation tax rate," Mr Kenny said in Brussels.

"Because of that fact, agreement has not been forthcoming in what was agreed as a principle that there should be a reduction in interest rates."

It is, however, unlikely that a deal will be struck at the two-day European Council summit. EU finance ministers will meet again in July.

The Taoiseach, who has refused to put a deadline on negotiations on the interest rate, is expected to raise the issue when European leaders meet at dinner.

"Our officials are in contact on a regular basis with their counterparts and the different countries on the various formula to arrive at a conclusion where the interest rate which was agreed in principle can be reduced but that there be no shift in Ireland's corporation tax rate," he said.

"We have discussions ongoing with the French and they will continue. There is a form of words there that needs to be discussed. I would hope we might make progress on that."

Mr Noonan had talks with French finance minister Christine Lagarde earlier this week at a meeting of European finance ministers, the Ecofin meeting in Luxembourg.

"There were no indications coming forward yesterday that the French Government had moved their position and of course there are no circumstances in which we will negotiate a change in our 12.5pc corporation tax rate," Mr Noonan said.

"All the international organisations which are relevant are in favour of a cut in the interest rate - the EC, the IMF, the OECD are all on record.

"Of the 27 states - 25 are either openly supportive or have remained silent on the issue."

Mr Noonan added: "France and Germany are the two outliers but the case is being particularly run by France and it's being run out of the Elysee (Palace).

"Until there is a move there it will not be resolved because we are not moving on corporation tax."

And amid opposition criticism that the Taoiseach or Mr Noonan should be dealing direct with President Nicola Sarkozy, Mr Noonan said: "I don't have that phone number."

"You are dealing with governments always... there's no point in individualising it," he said.

© Press Association