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January 28, 2011

ECB dismiss Ireland renegotiation talks

German Logo of the ECB.Image via Wikipedia
Political attempts in Ireland to get the IMF/EU bail out deal renegotiated were dismissed by the European Central Bank last night which warned that reneging on the deal was not an option.
Fine Gael and Labour, the two parties expected to form the new Irish government, have both made renegotiation of the deal an election issue.
But Lorenzo Bini Smaghi, an executve board member of the ECB, last night said it was not possible.
He also said Ireland's case was made more difficult because it refuses to raise its corporate tax-rate from 12.5 per cent.
"What looks strange is that Ireland wants to stick to its own tax system but then doesn't want the taxpayer to pay for it when things go wrong...I think it's right that Ireland should choose its own tax system but then it has to have the ability to stand by it when things go wrong, when corporation tax collapses because of a crisis," he told RTE's Primetime which can be seen here.

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