Ahern rules out change in farming subsidies

The Republic would not abandon its opposition to changes in the way the European Union subsidises farming, the Taoiseach insisted yesterday.

Mr Ahern, speaking in Bonn after a 75-minute meeting with the German Chancellor, Mr Gerhard Schroder, said farm subsidies were one part of the Agenda 2000 reform package where he saw no room for compromise. He ruled out agreeing to a system of co-financing favoured by Germany whereby governments would share with Brussels the burden of subsidising agriculture.

"Co-financing is not something I support even the principle of. It would do very little to address the problems of the net contributors, but it would place a considerable burden on countries such as ourselves. This is one area we would not like to engage in discussions on," he said.

Mr Schroder appeared unimpressed, grinning as the Taoiseach outlined the Irish position. The Chancellor repeated Germany's commitment to changing the way farming is subsidised.

But he struck a more conciliatory tone than hitherto, pointing out that as president of the European Council from January 1st, he was obliged to look beyond national interests.

"We know there are different positions. Our task now is to re concile different views. We are aware it will not be easy," he added.

The Chancellor declined to say whether he viewed the Republic's proposed corporate tax rate of 12.5 per cent as representing unfair tax competition.

He said a study by the European Commission would determine such individual questions. But he repeated his government's call for greater tax harmonisation within the EU.

"It is a logical consequence of a single European currency that we talk more of the effect on direct taxation. "A bit more co-ordination is at hand - to use the word that I believe satisfies British sensitivities. That is the German position," he said.

Taxation did not arise at the meeting and Mr Ahern said later he was not concerned about it. But he made a thinly veiled attack on the German Finance Minister, Mr Oskar Lafontaine.

"Finance Ministers around Europe are saying that many people are not paying the top rate of tax . . . One thing I am not prepared to tolerate is Ireland being blamed for the transparency of our tax system," he said.