FRENCH FINANCE minister Christine Lagarde has a “strong appreciation” of the reasons for Ireland’s stance on its corporate tax rate, Minister for Finance Michael Noonan said yesterday, amid increasing signs that French pressure on the rate is coming mainly from the Élysée Palace.

Speaking after a 45-minute meeting with Ms Lagarde in Paris, devoted mainly to the impasse over corporate tax, Mr Noonan said he explained that “no matter how strong the demand is on us, we can make no concession” on the 12.5 per cent rate.

“It’s absolutely crucial to our programme of inward investment and consequently it’s crucial to our industrial policy and our jobs policy,” he said. “She has a very strong appreciation of that. I asked her to reflect on what I was saying. I know she will do that. But I wasn’t negotiating, I wasn’t asking her to give me concessions across the table. I just wanted to put everything in context.”

France’s official stance is that any reduction in the interest rate on Ireland’s bailout loans is conditional on an increase in the corporate tax rate.

Ministers have hinted recently that the finance ministry may be more sympathetic to Ireland’s position than the office of French president Nicolas Sarkozy in the Élysée Palace. Speaking to the US television network CNBC yesterday, former taoiseach John Bruton was quoted saying: “The pressure over the tax rate is coming from the Élysée rather than the finance ministry.”

On Ms Lagarde’s candidacy for the post of IMF managing director, Mr Noonan praised her highly and said it would be in Ireland’s interest to see her take on the role. “In the four months or so that I’ve known Christine Lagarde, I think she is an excellent candidate who has all the capabilities of being a very good head of the IMF,” he said.

“We also have a self-interested reason, of course . . . It’s important to Ireland’s interests to have somebody heading up the IMF who understands in detail the difficulties we face and the steps that have already been put in place to ensure that we can work our way out of it.”

Mr Noonan said the Government had not formally endorsed Ms Lagarde’s candidacy, “but certainly we see her as a very capable candidate who not only fulfils the qualities that we would require in the job but also would be in a position to assist us in fulfilling the requirements of our programme.”

Despite the dispute over tax, he said, the relationship between Ireland and France remained strong. “The Irish like the French and the French like the Irish,” he said.