Tuesday, 28 June 2011
Department of Finance
Michael McGrath (Cork South Central, Fianna Fail)
Question 96: To ask the Minister for Finance when he will raise the issue of an interest rate reduction on the European sources of funding as part of the EU / IMF Programme with his Finance Minister colleagues in the EU; if the matter is still being dealt with at EU Finance Ministers level as opposed to Heads of State level; and if he will make a statement on the matter. [17169/11]
Michael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
As the Deputy will be aware, the Euro Area Heads of State and Government agreed in principle to a reduction in the interest margin charged to programme countries. This has been applied to Greece and Portugal. However, a decision to apply it to Irelandâ€™s loans has not yet been taken. This is because another Member State is asking Ireland to deliver a quid pro quo in return for an interest rate reduction in the form of a change in our Corporation Tax. However, we have made it clear that we will not agree to this. Contacts on interest rates are continuing at official level. I have raised it at EU Finance Ministers meetings, and in bilateral meetings with my EU counterparts, most recently at the Luxembourg meetings of the Eurogroup/ECOFIN Council. Furthermore, this issue was raised in the recent contacts that the Taoiseach had with President Sarkozy on the margins of last weekâ€™s European Council meeting. While recognizing that the European focus is on the difficulties currently facing Greece, this government will continue to avail of every suitable opportunity to press our case for an interest rate reduction.