Ireland will wait to see what help is on offer for its embattled economy and banking sector rather than rush into a decision, but its corporate tax will not be up for debate, European Minister Dick Roche said on Thursday.
Talks are going on between the Irish central bank and the European Central Bank, the IMF and the European Commission about possible loans. The talks are expected to run into next week.
“I think we should see what kind of package comes out from that,” Roche told BBC radio. “It has to be done fairly fast, but I think it is more important to get it right than it is to rush.
“Remember, we are actually fully funded as an economy up to the middle of next year. We do not need to rush into something,” he said.
The Irish Times said yesterday, without citing sources, that initial aid talks between Ireland and a joint European/IMF mission centered on ways to reduce the size of Irish banks considered too big and reliant on ECB funding.
European Commission, European Central Bank and IMF officials arrived in Dublin on Thursday and Irish Central Bank Governor Patrick Honohan said he expected Dublin to receive tens of billions of US dollars in loans. However, Irish Finance Minister Brian Lenihan later said Dublin was not at the point of getting a substantial loan.
The Irish Times said one option being discussed was the possibility of selling off “non-core” assets such as Allied Irish Banks’ UK loan book and Bancassurer Irish Life and Permanent’s UK mortgage book.
To attract buyers, guarantees covering potential losses on the loans could be given, or agreement could be reached to share losses, the newspaper said.
A sticking point is Ireland’s low corporate tax rate which some higher-tax countries, including Britain, Germany and France, believe is unfair.
However, Roche said it was an important part of the country’s economic recovery, adding that Ireland was “certainly not prepared to allow people on the sidelines to take some advantage from this situation.”
“It is certainly not up for negotiation from our point,” he told BBC television.
“There has been some very unhelpful chatter in the background in the last few days about our corporation profit tax. Where would be the sense of destroying one of the great drivers of growth?” he asked.
Roche said Ireland had taken action to tackle its economic woes, but there had been an extraordinary change in the markets, which he put down to outside factors.
“It is a little difficult when you read some of the commentary that has been out there, particularly some from our continental friends in recent days,” he told BBC radio.
Ireland had “not been knocking on anybody’s door,” but it had received plenty of offers of support, he said.
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