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Ireland will reject corp tax hikes

Tuesday 15 February 2011 - by Andrew Hickley

The man predicted to lead the next Irish coalition government has declared that the country will firmly reject any changes to its minimal corporate tax rate after meeting with German chancellor Angela Merkel.

Enda Kenny, leader of the Fine Gael party, had set off to brief Merkel on the party's plans for Irish reform.

When questioned on the EU Competitiveness Pact proposed by Germany and France after the 40-minute meeting, Kenny rebutted suggestions that Ireland may be willing to compromise.

"We would see no change in that for Ireland, it is absolutely fundamental to our tax base for foreign direct investment," he told reporters outside the headquarters of Merkel's Christian Democratic Union.

The Competitiveness Pact seeks to closer align EU regulatory and economic principles, proposing controversial measures such as increased retirement ages and a common consolidated corporate tax base in return for the permanent creation of a European bailout fund.

Both the CDU and Fine Gael are members of the centre-right European People's Party, with Merkel having publically backed Kenny in the 2007 Irish election. Recent polls have pinpointed the party as having a 9 per cent lead on the Labour party before the election, to be held on 25 February. It is likely the two will form a coalition.  

It is understood that during the meeting Kenny also declared Fine Gael's intentions to request that unsecured bondholders are forced to foot part of the bill for Ireland's €85bn ($115bn) bailout, while outlining the budget cuts and economic policies his party will enact.

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