France’s Lagarde Urges Ireland To Hike Taxes To Cut Deficit

Author: Market News International | Category: News

PARIS (MNI) – French Finance Minister Christine Lagarde on Tuesday
urged Ireland to hike taxes in order to reduce its deficit.

Ireland’s low corporate tax rate, which allowed it to attract a
number of multinational firms to its territory, is often characterized
as unfair competition or “fiscal dumping” by its Eurozone partners,
including France.

“Ireland must reduce its deficit,” Lagarde told Parliament, noting
that the shortfall could be attacked from both the spending and revenue
sides.

Since the Irish government has already begun cutting outlays over
the past two years, “it is entirely desirable that Ireland use the tax
lever to reduce its budget deficit,” Lagarde said.

Asked whether the Irish banking sector and the financial system as
a whole would help shoulder the burden of the crisis, Lagarde reminded
lawmakers that the country’s three leading banks were already
“practically” nationalized.

Since the shareholder of the banking system is the government, and
by extension the Irish taxpayer, the matter of burden-sharing is
resolved, she said.

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