Ireland can't take aid, keep low company tax: Sarkozy

13th January 2011, Comments 0 comments

Ireland should not be allowed to benefit from European Union aid while maintaining its low company taxes, French President Nicolas Sarkozy said on Thursday.

"I deeply respect the independence of our Irish friends and we have done everything to help them," Sarkozy told workers at a plant of plane-maker Airbus in southwestern France.

"But they cannot in the long term tell us 'come and help us' and continue to keep taxes on companies' profits at half" that of other countries," he said.

Ireland's 12.5 percent corporation tax on company profits is one of the lowest in the world and partly contributed to the "Celtic Tiger" boom before the economy crashed dramatically in 2008 in a banking-sector crisis.

"One cannot talk of economic integration without convergence of fiscal systems," Sarkozy said.

"With (German Chancellor Angela) Merkel, we are going to reinforce European economic integration and we are going to progress towards fiscal convergence," he said.

Cash-strapped Ireland has been bailed out with an emergency loan of 67.5 billion euros from the European Union and the International Monetary Fund. Dublin contributes another 17.5 billion euros to complete the package.

Some European nations, where corporation taxes are much higher than in Ireland, want the competitive Irish tax level to be raised in return for the bailout but Dublin has fiercely resisted any such move.

© 2011 AFP

0 Comments To This Article