Sarkozy attempts to financially bully Ireland using suspect statistics

 

“People should be aware that the average effective corporation tax in the European Union is 13% when write-offs are taken into account. This is almost exactly the same as Ireland’s corporation tax rate of 12.5% and our effective rate which is 11.9%. France’s effective corporation tax rate is just 8.2% when write-offs are taken into account.

 

“France displays impressive sleight of hand in how it communicates its corporation tax. It maintains that it has a penal headline corporation tax rate of 34.4% but, by deploying accountancy smoke and mirrors, French businesses write-off three quarters of their corporation tax. This means that French firms end up paying effectively only 8.2% corporation tax which is far lower than the Irish rate.

 

“Sarkozy wants to punish Ireland for being honest about our rate. He wants to take advantage of our current economic vulnerability to by poaching companies like Microsoft and Intel from Ireland. This cannot be allowed to happen.

 

“It is less than honest of Sarkozy to use corporation tax as an excuse to charge Ireland draconian interest rates on loans. The interest rates on the European bailout loans are extortionate. For every €2 billion that Ireland repays in interest costs, over €1 billion is pure profit for our European partners.

 

 “When the loans are fully drawn down Ireland will be paying €1.3bn of pure profit to our partners in Europe every year. This is a huge additional burden for a country already stretched on the rack. €1.3 billion is in excess of one per cent of Ireland’s national income and equates to:

Three times the €420 million raised by the changes to the Universal Social Charge introduced in December’s Budget;

 

A third higher than the €1 billion saved by reducing public sector wages in Budget 2010;

 

One and a half times the €822 million reduction in social welfare payments in Budget 2010 and Budget 2011.

 

“To put this into scale, it would be the equivalent of charging France a profit margin of €21 billion per annum. This flies in the face of the founding principles of the European Union. There should be solidarity between member states in times of crisis. Instead Sarkozy is trying to kick Ireland when we are down. I am calling on President Sarkozy to withdraw his requests for an increase in Irish corporation rate.