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Ireland determined to keep corporation tax system

Irish government resists pressure from France and Germany to change national corporate tax rate over conditions to ease EU-IMF bailout terms.

Irish government resists pressure from France and Germany to change national corporate tax rate over conditions to ease EU-IMF bailout terms.

Taoiseach Enda Kenny said his government will not raise the Irish corporation tax rate, which is used as an incentive for foreign companies to invest in Ireland.

France and Germany want Ireland to change its low corporation tax regime, something which successive Irish governments have regarded as critically important for Ireland in attracting outside investment.

Attending his first EU summit as First Minister of Ireland on 11 March 2001, Mr Kenny was asked by French President Nicolas Sarkozy and German Chancellor Angela Merkel to change Ireland's corporation tax system as a condition for bringing down the interest rate on Ireland's rescue loan.

On 21 November 2010 the Irish economy received a €85 billion rescue package from the European Union and the International Monetary Fund to help the state cope with the state of its finances.

The Taoiseach, who asked his EU counterparts for a 1% reduction in the bailout interest rate, also held a private meeting with Mr Sarkozy and Ms Merkel.

The French President and The Taoiseach clashed on the issue of Irish corporation tax during the meeting, after which Mr Kenny told "Obviously the French President has very clear views about the corporation tax rate for quite some time, and then, so have I."

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