Noonan seeks to woo French support on bailout

FINANCE Minister Michael Noonan yesterday brought his battle to win French backing to improve the country’s rescue fund to Paris, which is still demanding changes to the corporation tax rate.

He had an intense 30-minute meeting with French finance minister Christine Lagarde shortly after she announced her intention to seek the job of IMF president, replacing Dominique Strauss-Kahn, who is awaiting trial on sex charges in New York.

Taoiseach Enda Kenny said the Government has not yet discussed Mr Lagarde’s candidacy. “From a general point of view, I would like to see a European in charge of the IMF, with an understanding of what the European challenge is,” said Mr Kenny

Ms Lagarde is emerging as the favourite for the post, having won backing from Germany, Italy and European Commission president José Manuel Barroso. She also expects to be supported by the US and China.

Mr Noonan described Ms Lagarde as an excellent candidate, and said it was in Ireland’s interest to have someone at the helm of the IMF who understands the difficulties Ireland faces and the steps that have already been taken.

“We would see her as a very capable candidate who not only fulfils the qualities that we would require in the job, but also would be in a position that would assist us to meet the requirements of our programme,” he said.

Mr Noonan said he explained Ireland’s position on the corporation tax rate to Ms Lagarde in detail.

“No matter how strong the demand on us, we can make no concession on the rate of corporation tax. It is absolutely crucial to our programme of inward investment and, consequently, it is crucial to our industrial policy and our jobs policy.

“I also explained to her that of, all the sectors of the Irish economy, it is that sector that is going best and it is that sector that will lift us out of recession, as it is now doing.

“Our recovery in the first instance will be export-led and our job creation will be in the exporting countries. She has a very strong appreciation of that and I asked her to reflect on what I was saying... but, as I say, I was not negotiating. I was not asking her to give concessions.”

Mr Noonan said he explained that, when companies were looking for a place to locate, it was not always a choice between Ireland and another EU country. In the case of Google, for instance, the company’s choice was between Ireland and Switzerland.

“There are a number of other large companies and they choose between Ireland and Singapore, or Ireland and other non-EU countries,” he added. “So the fact that Ireland fails to get a project does not mean it will go elsewhere in Europe.”

Ms Lagarde said she would serve a full five-year term if chosen, unlike her three predecessors, and would prioritise completing reform of the IMF to give greater weight to emerging economies.

A 55-year-old former lawyer who led one of the world’s biggest international law firms before French president Nicolas Sarkozy brought her into government, she has served as French finance minister for the past four years. She has won praise for her abilities in presiding over G20 and G8 ministers meetings and helping steer the eurozone’s finance ministers.

But she faces opposition from countries that object to the fact that the post has been held by France for 26 of the last 30 years, and from emerging markets like Brazil and India. The decision will be made at the end of June.


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