FRENCH FINANCE minister Christine Lagarde suggested Ireland could alter the way it taxes companies while maintaining the 12.5 per cent rate as a way of appeasing European Union partners who have provided the country with emergency loans.

“Everybody will have to save face, but there will have to be movement,” Ms Lagarde said at a Washington summit. “I don’t know whether it is the 12.5 per cent or the base. We have to take the two components into account.”

She was speaking at a meeting of finance ministers and central bank governors of the world’s most important economies.

The Group of 20 were poised to agree last night the criteria by which they would assess whether countries should receive special scrutiny by the International Monetary Fund. The G20 sees this move as a small step along the road to trying to resolve global economic imbalances, which contribute to overheating in emerging economies and persistent unemployment in the developed world.

Tough decisions needed to resolve imbalances such as greater currency flexibility in emerging markets have been put off until the autumn, and there was no sign a meeting of minds was any closer.

The G20 also discussed progress on financial reforms for large and systemically important financial institutions and the international monetary system, but no decisions were expected.

George Osborne, UK chancellor of the exchequer, said “indicative guidelines” had been agreed to measure which countries were contributing most to global imbalances. “We will now go to the stage of assessing which countries are worthy of further examination against these guidelines. I fully expect the UK will be one of them given our large budget deficit, which is being addressed.”

Other G20 officials said the list of countries – which is not certain to be published – would include all large and important economies and those which account for more than 5 per cent of G20 output.

That list would include the US, China, Japan, Germany, France and Britain individually, but also the euro zone as a bloc. Other countries were expected to be on the list given large public or private debt levels or large external surpluses.

The US, meanwhile, hardened its stance on China’s managed currency. European finance ministers pointed out the renminbi has depreciated against the euro even as it has modestly appreciated against the dollar. China insisted yesterday it would not be rushed into increasing the flexibility of its exchange rate. – (Copyright The Financial Times Limited 2011)