Mr. Ronan Hession:

They are indeed. The proposal does not affect the 12.5% rate and the Government has a firm position on it. The question that was posed previously in the analysis by Ernst & Young was that if this affects the base, does it not put the Government in the situation where it has to increase the rate to compensate. What the Ernst & Young analysis found was that in Ireland's case, because of the sensitivity of our rate, it would not be an effective solution. Its analysis said even if the Government was to compensate with a rate, the impact on investment and FDI, etc., would be negative and therefore it was not an answer that a country like Ireland could turn to. The Government has been absolutely clear that the 12.5% rate will not be affected by this. We have a genuine question about that because we have other rates in Ireland. In Ireland we make a distinction between trading profits, which are taxed at 12.5%, and non-trading profits of passive income, interest, royalties, dividends, etc., which are taxed at 25%. It is not clear to us where our 25% rate sits in all this or indeed out 33% capital gains rate. It could just be a clarification point from the Commission.