Rehn says interest rate on Ireland's EU-IMF bailout could be cut

The European commissioner for Economic and Monetary Affairs, Olli Rehn, said today that a unilateral Irish re-negotiation of the EU/IMF deal is not feasible but he signalled that the interest rate could be adjusted.

Rehn was speaking in Brussels, ahead of the monthly meeting of the Eurogroup of Eurozone finance ministers.

The commissioner said the EU had signed a Memorandum of Understanding with the Irish State and "we expect continuity" from the next government.

But he said there could be "changes to the pricing policy," and he made clear that this would be as a result of an EU agreement rather than Irish political pressure.

In Berlin, Fine Gael leader Enda Kenny, said after meeting German chancellor, Angela Merkel, that he told her Ireland wouldn’t consider changing its corporation tax rate as part of a proposed pact of competitiveness agreed by Merkel and Nicolas Sarkozy, the French president.

Speaking to Reuters, Kenny said corporate tax was fundamental to attracting foreign direct investment to Ireland.

He said his party had “signed on” to discuss other issues proposed in the pact such as increasing the pension age and greater fiscal consolidation and regulation in the Eurozone.

In Brussels, Finance Minister Brian Lenihan said there is "no leeway" to re-negotiate the EU/IMF deal and to suggest it's possible was "very misleading."

Also speaking to reporters as he arrived for the Eurogroup meeting, German Finance Minister Wolfgang Schäuble said his government is seeking agreement on a package of measures to strengthen fiscal policy by the end of March. The German government is linking agreement on that package to an expansion of the European Financial Stability Facility (EFSF) bailout fund.

"On the sidelines we will probably discuss whether there is a need to discuss additional measures for the EFSF in the short term, but the markets are so stable that we probably won't upset them with unnecessary discussion," he said.

"We'll discuss all these questions but it's clear that we won't take any decisions," he added.

Source: finfacts.ie