Irish Prime Minister Enda Kenny said on Wednesday he would press for lower interest rates for Dublin's EU/IMF bailout but insisted higher corporate taxes would not be part of any such deal.
Kenny said a deal had already been reached in principle to lower the nearly 6 percent interest rate on the European Union and International Monetary Fund 85 billion euros bailout, and that the details would be hammered out once Portugal finalized details of its pending bailout package.
At the recent (euro zone) meeting in Brussels ... it was agreed that countries within the bailout package could have a reduction of interest rates applied to them, Kenny told Reuters Insider television.
Kenny said that once details were finalized for a bailout for Portugal, which said late on Tuesday it had reached a three-year bailout deal with the EU and IMF, Dublin could negotiate an interest rate reduction which would be significant in Ireland's case.
But he refused to consider higher corporate tax rates in Ireland and said his visit to New York was partly to reassure American firms that might consider putting jobs in Ireland that the country's 12.5 percent tax rate was set in stone.
The corporate tax rate is not negotiable, he said. We are not moving from our 12.5 percent corporate tax rate. Our country is open for business.
'BREACH OF TRUST'
Kenny said any such tax hike would be a massive breach of trust, particularly with American foreign direct investment in this country.
After a euro zone summit in March, Kenny said he had reached a deal in principle to cut Ireland's interest rate by 1 percent, but that he was not prepared to raise corporate taxes in return for the deal.
Portugal's caretaker Prime Minister Jose Socrates announced late on Tuesday that Lisbon had reached a bailout deal with the EU and IMF after weeks of talks, becoming the third euro zone country to do so, after Greece and Ireland.
The interest rate on Portugal's bailout, which Socrates' office says will total 78 billion euros, is expected to be set at a meeting of euro zone finance ministers in mid-May.
Ireland's rescue package agreed to last November has failed to resolve Ireland's banking crisis and Kenny's government, elected in February, has said the current package must be changed to avoid the risk of default.
The Fine Gael leader said his coalition government is committed to selling $2 billion euro worth of state-owned assets and that any sale will be decided on the basis of which deals could add most jobs to the beleaguered Irish economy.
On Ireland's troubled banks, Kenny said if Anglo Irish Bank needs more help that bondholders should expect to contribute.
If a requirement comes in for further capital injection into Anglo Irish Bank, the government will treat that accordingly and we would look at the question of senior bond holders in a very different light than we did when we didn't decide to burn senior bond holders with either Allied Irish Bank or Bank of Ireland, he said.
A solution to Irish banks' funding crisis and a cut in the cost of the deeply unpopular EU-IMF bailout would be a huge coup for Kenny. But to get such a deal he will come under intense pressure to concede on Ireland's low company tax rate, viewed as an unfair advantage in other European capitals.
Kenny's government has said it wants to cut the taxpayers' bill for bailing out the banks -- 46 billion euros and climbing -- by imposing losses on unsecured senior bonds in Irish banks not covered by a state guarantee, valued at 16 billion euros.
(Reporting by Mark Egan; Editing by Peter Cooney and Vicki Allen)