Minister for Finance Brian Lenihan has accused Fine Gael leader Enda Kenny of misleading the public over his meeting in Berlin yesterday with German chancellor Angela Merkel.
German politicians last night dismissed Mr Kenny's insistence that Ireland’s corporation tax is off the negotiating table ahead of next month’s EU summit.
Mr Lenihan claimed Mr Kenny's claim was dismissed just hours after yesterday's meeting in Berlin.
"It is clear from reports that his assertions cut little ice with Mrs Merkel’s German colleagues", Mr Lenihan said in a statement. "It beholds us all to be straight with the people. Enda Kenny should not be touting as fact here at home assertions that are dismissed within hours of his visit to Berlin."
Describing the claim that the US Federal Reserve would lend Ireland's banks $50 billion as "bizarre", Mr Lenihan called on the Fine Gael to explain how he will cut public service numbers without recourse to compulsory redundancy and how he plans to save €5 billion through other "unspecified efficiencies".
Fine Gael finance spokesman Michael Noonan said this morning that unless the terms of the bailout are eased, banks could move into a default position. Mr Noonan also said Allied Irish Banks, which the government is in the process of nationalising, should be sold.
Speaking after yesterday's meeting in Berlin, Mr Kenny said he told Dr Merkel that Ireland was prepared to "pay its way and play its part" in euro zone reform, but that a change of government would not alter the official position on the 12.5 per cent tax. Mr Kenny said he made it "perfectly clear" that from an Irish point of view, the corporate tax rate and the consolidated tax base "are of absolute fundamental importance to Ireland and that we could not concede any movement on those."
However, leading CDU officials familiar with yesterday's talks said afterwards that the corporate tax issue was by no means off the agenda.
"Everything depends on everything else and we're not interested in one individual issue being factored out," a close political adviser to Dr Merkel told The Irish Times.
