Taoiseach Micheál Martin and French president Emmanuel Macron agreed on Brexit, an EU response to the Afghan refugee crisis and a series of bilateral issues during talks in Dublin on Thursday.
However, there were differences on an international minimum corporation tax rate during lengthy discussions between the two men at Government Buildings.
Senior sources acknowledged differences between the two sides on the question of a minimum international corporation tax rate, long a source of tension between Dublin and Paris. France has been a strong promoter of the plans while Ireland has refused to sign up to Organisation for Economic Co-operation and Development proposals for a minimum 15 per cent rate.
Irish officials expressed anxiety that the OECD plan to set a global business tax rate of "at least" 15 per cent would open the door for Brussels to seek a higher EU rate. French officials acknowledged such concerns but were non-committal on doing anything about them.
In a joint press conference following their meeting, Mr Macron said he understood the Irish economic model had been based “in some respects on very low corporate tax” but he said the post-Covid world would be different.
‘Not putting pressure’
However, he insisted, he did not want to push Ireland in any particular direction. “I’m not one to put pressure on my friend,” he said. “I want to believe we will find the right path together because it makes sense.”
But, he said, citizens “want us to change a system” that enabled multinationals to avoid tax while small businesses had to pay. “I’m confident, but I’m not putting pressure, I’m working with your taoiseach,” he said.
But there were plainly tensions on the issue. One senior French source said of the process that there was “a grain of sand in the mechanism and the grain of sand is Ireland”, while senior Irish sources acknowledged that difficult negotiations lie ahead in the coming months, with Ireland in an isolated position.
Ireland remains one of the last holdouts refusing to back the OECD plan. Although Mr Macron claimed he was not trying to pressure Ireland, one Irish figure said that was exactly what happened: “They were pushing for us to sign up to the OECD.”
Positive mood
But the overall mood of the meeting was overwhelmingly positive, officials said, and both leaders were keen to stress their agreement on a wide range of issues and their commitment to common EU approaches to international challenges such as migration and climate change.
There were also warm words of support from the French on the Northern Ireland protocol and Brexit. Both leaders insisted the UK would have to abide by the agreements it made on leaving the EU, but Mr Macron also had another message for Mr Martin about French support on the Brexit and protocol issue: "To put it bluntly, we will never let you down."
Earlier, Mr Macron met President Michael D Higgins at Áras an Uachtaráin, where they held discussions on the future of Europe with writers and intellectuals.
After his meeting with Mr Martin at Government Buildings, he visited Trinity College Dublin and the Guinness Storehouse, before returning to the Áras for a working dinner with Mr Higgins.
He returned to Paris late on Thursday night.
