Ireland clinging to cherished corporation tax rate

A man walks past newspaper headlines posted on a news stand on O'Connell street, Dublin, November 19, 2010. A financial aid plan to help Ireland cope with its battered banks will be unveiled next week, EU sources said on Friday, but experts warned a rescue may not be enough to prevent contagion to other euro zone members. - Photo by Reuters.

DUBLIN: A major stumbling block in talks between the EU, the IMF and Dublin is Ireland’s 12.5 per cent corporation tax rate, which has helped attract international companies and spark growth.

The rate, one of the lowest in the world and a key reason why companies such as Google and Microsoft do business in Ireland, is under severe pressure as negotiations on a bailout package continue in the Irish capital.
The European Union and the International Monetary Fund want to see it raised in return for any bailout for Ireland and its debt-ridden banks.

Europe, IMF launch ‘urgent’ Irish rescue mission

A pedestrian passes a newsstand on O'Connell Street in central Dublin. Ireland came under intense pressure to request aid over its debt crunch in what the European Council’s president called a “survival crisis” for the euro zone and the wider European Union. –Reuters Photo/Cathal McNaughton

BRUSSELS: Europe and the International Monetary Fund announced Tuesday the launch of an urgent mission to Dublin to finalise emergency support for Ireland’s devastated banking sector.

The arrival of experts from the European Commission, the European Central Bank and the IMF represents a further blow to Irish hopes it can ride out its debt crisis alone, although Dublin has yet to accept money.

It underlines fears among euro partners for the broader stability of the soon-to-be 17-nation currency area, after a bottomless banking bailout pushed Ireland’s public deficit beyond 30 per cent of output this year.