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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.

Sharon Bowles, chair of the European Parliament's Economic and Monetary Affairs Committee, on Monday accused Merkel of striking a "heavy blow" against hopes for an Irish recovery.

The attack follows a meeting of eurozone leaders at the weekend at which Ireland refused to cut its low 12.5 per cent corporation tax in return for a one per cent interest rate cut.

Bowles said: "The treatment Ireland is getting at the hands of Germany in particular is very un-European. This holier than thou attitude of Merkel is unreasonable and Ireland does not deserve to be held to ransom."

The summit saw clashes between Irish Prime Minister Enda Kenny and French President Nicolas Sarkozy over the interest and tax rates. However, Bowles reserved her ire for the German Chancellor.

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."

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2011-03-15 15:25:28 | Peter
So who is Sharon Bowles and where does she get off "attacking" the hand that is feeding her and her pitiful country. Kick 'em out of the EU and send Ms. Bowles the bill for the bailout.