Creighton claims Germans support bailout rate cut

GERMANY appears ready to support a cut in the bailout interest rate and is not demanding a change in the corporation tax rate in exchange, Europe Minister Lucinda Creighton said after meeting politicians in Berlin.

She raised the prospect of Ireland having to tap a new loan under the EU’s new permanent rescue fund, which comes into force in mid-2013, if the rates on the open market are still too high.

Under the European Stability Mechanism (ESM), Ireland would be forced to burn bondholders, in contrast to the current agreement which ruled it out.