Kenny set to clash with Merkel on corporate tax

TAOISEACH Enda Kenny put himself on a collision course with German Chancellor Angela Merkel last night when he said he could not support a common corporate tax base in exchange for a lower interest rate.

In what appeared to be a breakthrough in Ireland’s demand for a better deal on the €67 billion EU/IMF loan on the eve of today’s summit, Ms Merkel said she would support a moderate reduction in the cost of the rescue loan.

But there were also renewed fears that the country will come under fresh pressure to cut its 12.5% corporation tax rate as some countries pushed for references to “harmful tax competition” in the overall agreement to be discussed today.