Kenny firm on tax policy

Fine Gael leader Enda Kenny has warned German Chancellor Angela Merkel that Ireland will not budge on its controversially low corporation tax.

Mr Kenny stressed the importance of the 12.5% rate during talks with the top EU politician in Berlin, which his political opponents dismissed as a photo opportunity.

“I made it perfectly clear to the Chancellor that from our point of view the corporation tax base and the consolidated tax base are of absolute fundamental importance to Ireland and that we could not concede any movement on those,” Mr Kenny said.

The Fine Gael leader also raised the possibility of renegotiating the interest rate on the multi-billion euro loans from the International Monetary Fund and Europe.

The high-profile discussion took place ahead of two summits focusing on the euro-zone crisis next month, which Mr Kenny could be attending as Taoiseach if the opinion polls hold true.

It is Mr Kenny’s second meeting with a senior European politician this year, after he and finance spokesman Michael Noonan held talks with European Commission President Jose Manuel Barroso last month.

Mr Kenny said Ms Merkel was very well briefed but no decisions were taken at the meeting.

Separately, EU Economics Commissioner Olli Rehn indicated there was some scope for change on elements of the loan deal.

The Fine Gael leader faced criticism at home over the talks with Ms Merkel, with Fianna Fáil and Independent Joe Higgins dismissing it as a photo opportunity.

Sinn Féin said Ms Merkel did not care how important the tax rates are to Ireland.

Deputy leader Mary Lou McDonald said: “Merkel, like French President Nicolas Sarkozy, cares only about German, French and British bondholders, and of course progressing the EU’s long-held desire for a Common Consolidated Corporate Tax Base.”

Mr Higgins, who will travel to Strasbourg to meet Mr Barroso tomorrow, said debt would still be piled on taxpayers’ shoulders even if interest rates on the €85bn loan deal are reduced.

“Considering that the savage austerity being imposed on the Irish people at the behest of the EU/IMF arises from Chancellor Merkel’s and the European establishment’s desperation to rescue German and other European banks from their reckless gambling in Irish property, Enda Kenny needs to be in a position to tell the Irish people exactly what he means by ’renegotiation’ and whether he has firm commitments from the Chancellor,” Mr Higgins said.

Fine Gael’s justice spokesman Alan Shatter said the comments from the candidates were “extraordinarily churlish”.

Mr Higgins said he would tell Mr Barroso tomorrow that the question of renegotiation has become a central issue in the General Election campaign.