Cabinet to discuss bailout ahead of EU summit

THE CABINET will meet today to discuss the strategy it will pursue going into this week’s EU summit to renegotiate the interest rate on the €85 billion EU-IMF loan facility.

A Government spokesman said yesterday the summit was likely to dominate all Cabinet discussions this week, including today’s meeting of Ministers. Ministers would also be outlining their major priorities for legislation and early policy initiatives.

It is also believed that the summit was the dominant theme at yesterday’s meeting of the Government’s Economic Management Committee.

Ireland is seeking a reduction in the interest rate on its repayments on both the European Commission and European Central Bank loans. However, before Thursday’s EU Council, Taoiseach Enda Kenny and Minister for Finance Michael Noonan have insisted Ireland’s corporate tax rate of 12.5 per cent is non-negotiable.

Ahead of a meeting of euro zone finance ministers yesterday, Mr Noonan confirmed Ireland was prepared to make some concessions in return for a lower interest rate, including a legislative “brake” that would prevent the Government from going outside a prescribed percentage deficit limit.

The Government has also indicated a willingness to discuss the European Commission’s proposals for a common consolidated corporate tax base.

The Economic Management Committee, agreed between both Coalition leaders in parallel talks during the negotiations for the programme for government, comprises the Taoiseach, Tánaiste Eamon Gilmore, Mr Noonan and the Minister for Public Expenditure and Reform Brendan Howlin.

A Labour spokesman in Government said yesterday the committee was more powerful than a Cabinet sub-committee because of the involvement of both the Taoiseach and the Tánaiste. Its role was to decide overarching economic policy.

Later today the Dáil will begin a two-day debate on a Fianna Fáil Private Members’ Motion on Ireland’s corporation tax policy, the first to be tabled by the party since going into Opposition.

Fianna Fáil leader Micheál Martin said yesterday that Ireland’s corporation tax could not be changed or fudged during this week’s summit talks in Brussels.

“Clarity about Ireland’s corporation tax policy is absolutely critical. In tabling this motion, and in asking for cross-party support, we are seeking to emphasise and copperfasten that clarity.

“Different European states have different tax strategies.

“We respect the right of each country to pursue economic success in any way they wish within the rules. We only demand the same right.”

He said he expected the motion to receive the support of nearly all TDs in the Dáil.

“This will mark a strong statement before the upcoming European Council meeting that Ireland’s position on this issue has not changed and will not change.”