Fine Gael leader Enda Kenny has told German chancellor Angela Merkel today he is not prepared to sacrifice Ireland’s corporate tax rate as part of euro zone reform.
At a meeting in the headquarters of Dr Merkel's Christian Democratic Union (CDU), the two politicians discussed the “possibility of movement on an interest rate on the IMF/EU deal”. Mr Kenny declined to elaborate on whether the German leader was sympathetic to the sharing the burden of banking debt with private bond holders.
“Obviously it wasn’t a meeting or negotiations, but out of all of this was a priority was retention of corporate tax rate as fundamental for the attraction of foreign direct investment,” he said, adding the “corporate tax base was of equal importance”.
“I made perfectly clear on the corporate tax rate that we would not contemplate in any circumstances moving on this. I made clear it is not acceptable and that it would not be interest of Ireland or Europe.”
The Fine Gael leader also said his party would work to repair relations in Europe.
If elected Taoiseach next month, Mr Kenny said he would take a relaxed view of next month’s EU negotiations on the Franco-German “competitiveness pact”. The proposals call for closer inter-governmental regulation of social and economic affairs, with calls for harmonised retirement age and corporate tax base.
“Many of the issues tabled are things we’ve already been discussing and implementing ourselves, be it age increase for pensions or fiscal consolidation,” he said. The Fine Gael leader added that his party would look at other proposals put on the table by France and Germany, including a constitutional amendment to limit government debt.
Asked about the recent anti-German tone in sections of the Irish media, Mr Kenny said it was important to realise that Ireland’s problems are home-grown.
“The problem in Ireland was not caused by Europe but a lack of regulation, a lack of oversight and government incompetence,” he said, warning against antagonising our European partners. “This problem was caused at home first. I know about exposure of German banks, obviously we’ve got problems, some of which we can deal with ourselves [and] some in a European context.”
He said Ireland had turned in on itself in the last decade and that a priority of Fine Gael would be reactivate connections around Europe at a political and parliamentary level.
“One of the issues we have to deal with is the damage done to Ireland’s reputation,” he said. “We have lost in the last decade the ability to continuously interact with other countries . . . to keep that reputation as high as it used to be.”