Ireland has three countries between it and a lower interest rate on its bailout loan, according to the Irish Independent. Ireland needs a unanimous vote to get that rate cut from the EU.
The first two, Finland and Germany, are worried about domestic political issues. The Fins are holding an election on April 17, and should be open to allowing the Irish rate cut thereafter. The recent elections in Germany have hit Chancellor Merkel hard, and it may be sometime before she can allow an Irish rate cut to occur, without seeing strong opposition from her base.
But the problem with France could last well into 2012, according to the Irish Independent. French President Nicolas Sarkozy is using the issue of Ireland’s low corporate tax rate as a political tool in that country’s elections, according to Irish politician Proinsias De Rossa.
Sarkozy is currently trailing the rival Socialists in the polls, who may end up with Dominique Strauss-Kahn, the current head of the IMF, as their presidential candidate. The election won’t be held until April-May of 2012, so unless Sarkozy has a sudden change of heart, the Irish may be burdened with their high lending rate for more than another year.