Fianna Fáil Spokesperson on Public Expenditure Michael McGrath TD has welcomed the conclusion of the Eurogroup Summit but has called on the Government to clarify the commitment given on corporate tax harmonisation.
Deputy McGrath said: “We welcome the decision to improve the conditions for loans to Greece under the EFSF and the extension of these measures to other countries including Ireland. The measures announced provide for the possibility of the overall debt burden being reduced by allowing the EFSF to buy Government bonds in the secondary debt markets. The Government needs to clarify if this option is available to Ireland. This is an important policy instrument which the Government should seek to implement with immediate effect.
“The reduction in the interest rate is to be welcomed, albeit coming over four months after the Eurogroup Heads of State first agreed to the cut. The Government needs to clarify whether the interest rate cut will only apply to funds under the EFSF. Ireland is borrowing approx. €17.5 billion under the Programme of Financial Assistance agreed with the EU / IMF, which is only a quarter of the total amount being borrowed under the Programme (€67.5 billion). The Government also needs to clarify whether the rate cut will apply to funds already drawn down under the facility.
“The Government’s commitment to engage constructively on the CCCTB issue is a significant cause of concern. CCCTB represents a major threat to Ireland’s attractiveness as a destination for inward investment. Anything that casts doubt on Ireland’s corporate tax regime will be very damaging to our economic interests. The Government’s commitment to constructive engagement implies that it is disposed to reaching an agreement on CCCTB. The Taoiseach now needs to clarify whether the Government remains opposed to CCCTB, which he previously described as ‘tax harmonisation through the back door’.
“In addition, the Taoiseach should now immediately publish the draft agreement tabled by President Van Rompuy at the March 11th summit. There is a belief that there was a significant interest rate reduction on the table for Ireland in exchange for engagement with discussions surrounding CCCTB but this was dismissed out of hand by the Taoiseach at the time. The Taoiseach needs to explain what he has signed up to and how it differs from what was offered previously.
“Hopefully these important measures agreed by the Eurogroup will finally convince investors that Europe will take whatever action is required to address this crisis. The verdict of the markets will be the litmus test in that regard.
“What is not yet clear is whether there has been any consideration of Ireland’s wish to deal with certain additional classes of bank bondholders. Today’s deal gives a window of opportunity which we should take to implement burden-sharing with the remaining unsecured, unguaranteed bondholders at Anglo Irish Bank and Irish Nationwide. We should not wait until the autumn to raise this issue in a meaningful way as has been proposed by the Taoiseach,” concluded Deputy McGrath.