Bowles slams 'holier than thou' Merkel
Monday 14 March 2011 - by Will Henley
An influential European MEP has clashed with German Chancellor Angela Merkel over EU reluctance to reduce Ireland's debt repayment interest rate.
The Econ chair claims that a one per cent decrease in the rate is not enough, especially when weighed against a potential interest rate cut by the International Monetary Fund.
Analysts said the proposed interest rate cut would save Ireland just €400m a year, whereas any corporate tax hike could cost the country billions were it to encourage companies to take flight abroad.
"Merkel is making the Irish pay twice for their sins - once to look after German banks because they are massively undercapitalised and exposed to Irish banks, which is why the Irish rescue package required a pledge to maintain the solvency of their banks, and then to make a tidy profit on the high interest," she said.
"I am asking Germany to play fair. By not doing so it means that Ireland has even less incentive to keep up its debt repayments, which is of no use as far as restoring confidence in the European economy is concerned, and the markets will recognise this."
|Login||Register||Most read||Most commented|
Will markets in 2012 have a tougher time than 2011?