Kenny: EU states should help, not hinder Ireland

THE European Union needs to “stand up and look at where it’s headed”, Taoiseach Enda Kenny said yesterday, claiming some countries were “blocking progress” to economic recovery through national concerns.

Responding to further signals from France that it will veto an interest rate reduction on Ireland’s bailout loan, Mr Kenny said member states should “help, not hinder” efforts by weaker countries to fix their economies.

The Taoiseach told the Dáil: “There is a real need for Europe to stand up and look at where Europe is headed here.”

During leaders’ questions, Mr Kenny insisted that Ireland will not give in to French demands to change the corporate tax rate in return for a reduction in the bailout interest rate from 5.8% to 5%.

He said he has made it clear to “all and sundry” that “we are not shifting from our 12.5% corporate tax rate”.

He confirmed that any interest rate reduction would only apply to the €24 billion to be dawn down in the future, and would not be applied retrospectively — as Greece experienced when receiving its rate cut.

This is because it would only apply to the €40.2bn share coming from the EU and not the International Monetary Fund, and because it will not apply to the €15.6bn of EU loans Ireland has already drawn down. The total Irish bailout is worth €85bn.

Mr Kenny played down the importance of such an interest rate cut, saying it would secure just €150 million savings per annum and not the €450m per year as previously stated.

He said it was “unfair” that “because of national interests”, extra conditions are being placed on Ireland that were not placed on Greece.

“European countries, politically, need to understand and appreciate that it’s necessary to help countries that are meeting serious challenges on their way to economic independence,” he said. “It’s unfair that this is being allowed to drag because of national issues blocking Europe’s progress.”

The Taoiseach said the reduction has been agreed to in principle by the European Commission and so, should be supported by member states.

Fianna Fáil leader Micheal Martin said Fine Gael and Labour had “negotiated nothing” with the EU since they came into power.

Mr Kenny said the Coalition was dealing with the “lousy legacy” left by Fianna Fáil.

Mr Martin then claimed there had been an “abject failure” among EU finance ministers “to fulfil the mandate given them by the European Council leaders to deliver lower funding costs to all countries”.

Sinn Féin’s Mary Lou McDonald told the Taoiseach: “You said other states act in their national interest. Well done for figuring that out. The challenge for you is to act in the interest of this state and its citizens.”