Lower growth predictions do not auger well

The European Commission reckons that Ireland's economic growth this year will be a paltry 0.6 percent, this down from an earlier prediction of 0.9 percent.

The EC is pointing the finger of blame at the collapse of Irish property prices, not down 40 percent on the market peak.

Growth in 2012 is expected to reach 1.9 per cent, the Irish Times reported. The EC also anticipates unemployment in the Republic will reach 14.6 percent before falling back to 14 per cent in 2012.

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The commission report said strong exports would lead the return to economic growth, but this would be "very modest," the report stated.

"The commission also said Ireland, Greece and Portugal may see their debt loads exceed the size of their economies this year." the Times report continued.

"It said Irish debt will reach 112 per cent (of Gross Domestic Product)," the reported added.

Against this backdrop, the Irish government has been campaigning to have the terms of the European Central Bank/International Monetary Fund bailout made less severe.

But the Germans and the French, the major backers of the bailout, have been hostile to the idea of reducing Ireland's interest rate - Dublin is looking for a one percent cut - or stretching the time span for repayment of what is in effect an €85 billion loan.

"Ignoring mounting criticism from Greece and Ireland over the terms of their bailouts, Chancellor Angela Merkel of Germany refused Tuesday to commit her country to any changes and insisted that 'bold reforms' were the only way to make their economies stronger," the New York Times reported last week.

The French have been walking in lockstep with the Germans and have focused on the thorny issue of Ireland's relatively low corporate tax rate of 12.5 percent.

The Irish government has insisted that the rate is not up for negotiation, a position emphasized by Taoiseach Enda Kenny during his recent visit to New York.

And taking the offensive as best they can on the issue, the Irish government has been pointing out that while France's official corporate tax rate is 34 percent, the rate actually paid by companies is far lower, more like eight percent in many cases and zero in some.

Meanwhile, the attempted rape charge in New York against International Monetary Fund chief, Dominique Strauss-Kahn, is being seen as a new twist and complication in the talks over IMF/ECB bailouts for several cash-strapped European Union member states, not least Ireland.