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Hint over EU bailout payment deal

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Fine Gael leader Enda Kenny has told German chancellor Angela Merkel that Ireland will not budge over corporation tax levels

Fine Gael leader Enda Kenny has told German chancellor Angela Merkel that Ireland will not budge over corporation tax levels

Fine Gael leader Enda Kenny has told German chancellor Angela Merkel that Ireland will not budge over corporation tax levels

Ireland has been given the clearest indication to date that the 85 billion euro bailout loan can be renegotiated to slash repayment bills.

European Commissioner Olli Rehn suggested talks would not achieve anything in 2010 but that the cost of the rescue package could be reduced in the following years.

"Concerning outer years, there is more room for manoeuvre," the economics chief said.

Fine Gael leader Enda Kenny discussed options for renegotiation during a meeting with German Chancellor Angela Merkel in Berlin, which was criticised by his political opponents as a photo opportunity.

Mr Kenny said that he told the Chancellor he wanted movement on the interest rate for the International Monetary Fund-European Union loan.

Commissioner Rein gave the indication after a meeting of eurozone Finance Ministers in Brussels, attended by Finance Minister Brian Lenihan.

"I'm following the Irish debate closely. The European member states have signed a memorandum of understanding with the Republic of Ireland," the Commissioner said.

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"We expect continuity of the memorandum. If there are changes to the pricing policy, which I support and the commission supports... it will take place for European reasons. It is essential to respect the memorandum, especially for 2011."

Mr Kenny also warned Chancellor Merkel that Ireland will not budge on its controversially low corporation tax. He stressed the importance of the 12.5% rate during talks with the top EU politician in Berlin.

"I made it perfectly clear to the Chancellor that from our point of view the corporation tax base and the consolidated tax base are of absolute fundamental importance to Ireland and that we could not concede any movement on those," Mr Kenny said.


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