Corporation tax 'not on EU agenda'

European Affairs Minister Lucinda Creighton has insisted that increasing corporation tax was never on the table during eurozone negotiations in which European Union leaders failed to agree on a treaty change.

She said there was no discussion on the controversial issue of increasing Ireland’s comparably low rate of 12.5% as leaders tried to strike a treaty change deal last night in Brussels.

“There never was any intention of having a discussion around corporation tax,” said Ms Creighton.

“It wasn’t an issue that was on the agenda at all.”

German Chancellor Angela Merkel and French President Nicolas Sarkozy had pushed for the whole EU to back a change to the Lisbon Treaty, which would see stricter budget and debt rules imposed across the eurozone states.

But British Prime Minister David Cameron blocked the move because the financial safeguards he had demanded for the UK were not on offer.

At least 23 of the 27 member states – excluding Britain – are now going ahead with their own treaty to introduce the tougher sanctions aimed at protecting the euro.

“(Discussions were) very much focused on strengthening mechanisms of economic governance and engagement between member states in relation to the currency,” Ms Creighton went on.

“And focusing on the so-called stabilisation – this firewall which we’ve been indicating for quite some time – there were some very significant steps there and we’re very hopeful they will make an important impact in terms of ensuring there won’t be further contagion within the eurozone from Greece.

“That’s certainly our number one priority here today.”

President Sarkozy has made numerous calls in the past for an end to unfair taxes across the eurozone states, suggesting that Ireland’s rate should be reduced.

But the Government has insisted maintaining the current rate of corporation tax is key to its economic policy of encouraging business growth.

Ireland’s economic security has been protected following eurozone talks despite states failing to agree on treaty changes, Taoiseach Enda Kenny has claimed.

He said work has been carried out to put firewalls in place to protect Ireland from contagion from countries such as Greece.

“Ireland’s economic security has been defended and protected,” said Mr Kenny.

“A great deal of useful work was done in respect of putting firewalls to prevent contagion and the substance of this has now been agreed and requires to be checked and analysed by each individual country.

“Specifically in Ireland’s case, I raised the exceptional difficulty that Ireland’s gone through in having to borrow very extensively prior to the bailout for bank recapitalisation and the challenges that faces for us and I placed that firmly on the table.”