Pressure on Ireland for early reductions in interest rates down to French and German levels was renewed yesterday by the President of the European Central Bank, Mr Wim Duisenberg.

With only 98 days to go before the introduction of the euro, Mr Duisenberg reiterated to Finance Ministers from the euro countries his warning earlier this week that a sudden fall in interest rates would not be in the interest of the single currency. Ministers were meeting here as the euro-11, with non-euro countries in attendance as observers, ahead of an informal meeting of EU Finance Ministers today.

Responding to questions from journalists about whether he favoured a gentle convergence of interest rates, the Minister for Finance, Mr McCreevy would only say that he had full confidence in the approach of the Governor of the Irish Central Bank but "nobody said there would be a sudden fall". That rates would converge by January 1st was not in doubt, Mr McCreevy said, a reality already reflected in the closing of the market spread between Irish and German long-term rates.

But Mr McCreevy did admit that he would be putting to Cabinet next week an options paper on sub-regionalisation of the country for EU structural fund purposes. The decision follows a meeting on Thursday of the senior group of officials and ministers preparing Ireland's negotiating position on Agenda 2000.

Although Mr McCreevy would not be drawn on his recommendation sources say that the Minister will back the sub-division of the country to allow western counties to continue to avail of maximum EU structural funding.

Mr McCreevy said that it was "mistaken" to believe that such an approach would yield overall significantly more cash for Ireland - "that is not the case".

But a case could be made that it makes economic sense for the country to channel funding to less developed regions and to be able to target industrial subsidies in this way, the Minister said. The EU allows national governments to give higher rates of industrial subsidies to firms based in regions defined as Objective One. Mr McCreevy is likely also to come under pressure today when the Austrian Presidency tables proposals for closer co-ordination of tax regimes. That would involve the dreaded word "harmonisation" with the Austrians suggesting limiting the gap between standard rates of corporation tax throughout the EU.

The move is an attempt to seal a related agreement on a minimum retention tax of 20 per cent on the bank deposits of non-residents throughout the EU, a proposal that does not go down well in Luxembourg or Britain. Luxembourg can be placated with a tough line on corporate taxation, but Mr McCreevy is likely again to put down a strong marker that Ireland's regime must remain untouched. Austria hopes to wrap up a comprehensive agreement involving both taxes as well as a long-promised tax on energy use before the end of its Presidency. Observers are sceptical - although the Austrians hope to make the energy tax more palatable by exempting householders from its provisions.

The key political decision of the weekend, however, is how the euro-zone will be represented in international financial fora like the IMF and G7. A tussle between the large and small countries is likely with France and Italy, with British support from the sidelines, arguing that they should perform the role in turn. The smaller member states argue that the Presidency should be given a seat at such meetings. With Germany in election mode Commission sources were last night predicting no decision would be reached.

Both France and Britain are likely, however, to launch a preliminary debate on the reform of the international financial institutions.

The IMF managing director, Mr Michel Camdessus, will join the ministers today to review the crises in Asia, Russia and Latin America, and the British Chancellor, Mr Gordon Brown, will speak in his capacity as acting G-7 chairman.

The Austrian Finance Minister, Mr Rudolf Edlinger, will also brief his colleagues on the results of his fact-finding visit to meet Russian monetary officials in Moscow earlier this week.