Ireland To Get Interest Rate Cut On Its Bailout Loan Without Sacrificing Its Low Tax Rate

IRELAND WILL GET a one per cent interest rate cut on the loan element of its €85 billion bailout from the EU and IMF without making concessions on corporation tax.

The Sunday Times (subscription required) cites government sources and reports what the BBC had yesterday revealed–  that a special written procedure will be adopted next weekend that will declare support for Ireland’s current average interest rate of 5.8 per cent being cut and that agreement will be sought from other member states at a two-day meeting of EU finance ministers on 16 May.

The cut to the current average interest rate could be worth €400 million to the Irish exchequer.

Some concessions will have to be made but these will not include Ireland’s low corporation tax rate of 12.5 per cent. The paper speculates that the issue of the common consolidated corporation tax base (CCCTB) – which  provides an EU-wide common basis for taxing profits – is still up for discussion.

Meanwhile, the Irish Mail on Sunday reports that a senior government minister has told the paper that Ireland will not be able to repay the €250 million in total it has borrowed from the EU and IMF and that the government expects Ireland’s debt will be restructured within three years.

It follows yesterday’s opinion piece by economist Morgan Kelly in the Irish Times in which he warned that Ireland faces bankruptcy unless it walks away from the bailout package.

Kelly’s views make the front page of the Sunday Independent, the Sunday Times and the Irish Mail on Sunday.