Irish minister hits back over talk of raising corporation tax to appease France and Germany

The UK will pay £7bn towards the £77bn bailout of Ireland, according to reports today.

Chancellor George Osborne, speaking to the BBC, said: "Our two economies are connected, and our two banking systems are interconnected.

"Ireland is a friend in need, and we are here to help."

Meanwhile, Ireland's Minister for Finance Brian Lenihan, said the country was not being put under pressure to boost its corporation tax from 12.5% to 18%.

A number of big-name insurers are tax-based in Ireland, including Zurich, Beazley and XL.

“Some member States last Tuesday did express the view that corporation tax should be looked at. We raised that issue in the interim and we have very clear assurances”, Mr Lenihan told RTÉ’s Morning Ireland .

“A statement from President Sarkozy, a statement from Chancellor Merkel and an acknowledgement confirmed to me yesterday by the French finance minister Christine Legarde that taxation is a domestic Irish matter,” he added.