IMF backs bid to cut loan rate and retain 12.5% tax

IRELAND’S bid to cut the interest rate on its rescue loan and keep its low corporation tax won strong support from the IMF, which warned that the EU was in danger of aggravating the crisis.

The body that loaned Ireland a third of the €67bn bailout said the EU needed to come up with a more comprehensive plan for troubled eurozone countries to prevent the crisis spreading and getting worse.

It cautioned against the Government making bigger spending cuts than already agreed, saying it could affect the growth so essential to recovery.