| Taoiseach Enda Kenny, pictured in his office in Government Buildings, following his election on March 09, 2011. In the background is a painting of Michael Collins, one of the founders of the Irish State. |
In advance of today's meeting of EU
leaders to discuss Eurozone reforms, both Germany and Austria said Ireland will
have to make concessions in return for a lower interest rate on the EU-IMF
On Thursday, Taoiseach Enda Kenny
met European Commission president, José Manuel Barroso, and a spokeswoman told
RTÉ that during the hour long meeting, President Barroso expressed an
understanding that the interest rate on the Irish bailout was a major issue for
Ireland and said the Commission supported Ireland on the issue.
Last November, the EU and IMF agreed
to provide a €67.5bn loan facility at a rate of 5.8%, even though the funding
cost was 2.9%.
The rate on the IMF's €22.5bn
portion of the loan was below 4% (variable depending on the maturities of the
advances) and a readjustment of member quotas by the Fund last week, triggered
a cut in the rate charged to Ireland.
Josef Pröll, Austrian finance
minister and vice-chancellor, said in an interview in the Financial Times
published today that he was only willing to negotiate on cutting the loan
interest rate, if Ireland made more concessions.
He said Ireland would have to
outline what it could do more at a national level to reduce their debt and
Germany Chancellor Angela Merkel’s
Christian Democratic Union party is facing a number of provincial elections and
in Berlin on Thursday, at a closed-door meeting, she is reported to have told
parliamentary colleagues that she would back lower interest rates for emergency
loans if Greece agrees to sell state assets and if Ireland backs a common
corporate tax base in the Eurozone.
The latter would not involve a
change in the corporate tax rate but it would give countries where
multinationals make a large proportion of sales in a domestic market, an
opportunity to gain a larger share of tax on profits, based on the ratio of
sales across the European Union.
Last night, Taoiseach Enda
Kenny told reporters in Brussels that this proposal is not acceptable.