Lagarde says Ireland needs to lose low tax status

(Reuters): France’s finance minister has renewed pressure on Ireland to give up its coveted low corporate tax rate after euro zone countries came to its rescue last year with an 85 billion euro bailout. European Union leaders are meeting on Thursday and Friday to try to narrow differences on long-term solutions to the euro zone debt crisis. As part of the talks, Dublin has called for better terms on its bailout loans. France and Germany insist Ireland must first boost its corporate tax rate – the lowest in the region — to bring it in line with the rest of the euro zone. In an interview with Reuters Insider, French Finance Minister Christine Lagarde said euro zone members "closed ranks" to help Ireland and should not be undercut by its corporate tax rate.

"Clearly there shouldn’t be tax competition between member states and there shouldn’t be a zone for arbitrage, and one that is not an appropriate level playing field," Lagarde said. "It’s a discussion that we will continue to have with our Irish friends."

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