Ireland will not raise its corporate tax rate despite pressure from France and Germany, even if that means paying higher interest rates on EU bailout loans, Minister for Finance Michael Noonan said today.

"We're not for turning on this issue. We're prepared to pay the price," Mr Noonan told reporters after talks with his French counterpart, Christine Lagarde, on the sidelines of an OECD meeting in Paris.

Asked if he was making headway with France on the issue, he said: "We think when we explain things to reasonable people, they respond... I feel like there's a greater understanding of my position."

But he declined to make any forecast of when Ireland might receive a reduction in the average 5.9 per cent rate on the euro zone rescue loans, already granted to Greece.

Asked about a warning by ratings agency Moody's that a Greek default, even in the form of a "voluntary" extension of bond maturities, could sap the creditworthiness of other stressed euro zone states, Mr Noonan said: "Whatever happens in Greece, I don't believe there'll be a serious contagion effect in Ireland."

Reuters