THERE IS a “better understanding” in Paris of Ireland’s position on corporate tax, Minister for Foreign Affairs Eamon Gilmore said after a meeting with his French counterpart Alain Juppé yesterday.
Mr Gilmore said he and Mr Juppé had a “very direct” discussion on the impasse over Ireland’s 12.5 per cent corporate tax rate. France has maintained that the tax rate should be raised as a condition for any reduction in the interest rate on Ireland’s bailout loans.
“I explained to him very clearly why the Irish Government will not increase the rate of corporation tax and why it is necessary for Ireland to maintain that rate to provide certainty for potential investors,” Mr Gilmore said.
Given that Ireland was complying with commitments it gave to the EU and the IMF, he said, “it is only fair that Ireland should benefit from the reduced rate”.
“I felt that foreign minister Juppé understood the case that is being made for Ireland,” he added.
Minister for Enterprise Richard Bruton claimed two weeks ago that the Government believed the French position on Ireland’s corporate tax was “hardening”. While not suggesting a shift in the French stance, Mr Gilmore said there was “a better understanding, certainly by foreign minister Juppé, of the Irish position, and that this is not just an Irish issue – this is also something that applies to the wider European area”.
Mr Juppé has no direct role in French economic policy, but is the second most senior cabinet member after prime minister François Fillon.
Asked whether Ireland would support French finance minister Christine Lagarde being nominated to take the helm at the IMF, Mr Gilmore said it would be a “very positive thing” if there were a successful European candidate.
“Ireland would certainly be willing to support Christine Lagarde’s candidacy in that regard. We’re very conscious of the fact that she is someone who understands Ireland, and understands the Irish economic issue, and who has shown a great degree of understanding of the issues and the difficulties that have arisen between Ireland and France.”
Earlier, a Government spokesman said Minister of State for European Affairs Lucinda Creighton had been expressing a “personal view” when strongly endorsing Ms Lagarde as the next head of the IMF on Monday.
Taoiseach Enda Kenny was more circumspect yesterday about Ms Lagarde, saying that the matter had not been discussed by the Cabinet and that no decision had been made on what candidate the Government would support.
Senior officials in Government privately say that if Ms Lagarde – a prominent financier before she became a French minister – was to emerge as the preferred European candidate, the Government would fully support her.
It was pointed out that she has enjoyed a very good relationship with Minster for Finance Michael Noonan and that her stance on corporation tax reflected the strong views of her government and of French president Nicholas Sarkozy but that she would not necessarily express the same view if she joined the IMF.
Mr Noonan is due to meet Ms Lagarde in Paris today.
