EU Will Not Repeat Irish Budget Mistake

by Ulrika Lomas, Tax-News.com, Brussels

12 July 2001

During the EU's eventful Ecofin meeting on Tuesday at which Irish Finance Minister Charlie McCreevy and a number of other ministers criticised Belgian plans for a direfctly-imposed eurotax, it became clear that the Commission is not planning any further public attacks on member states budgetary shortcomings.

In June, the Commission was forced to back down in the face of opposition from Mr McCreevy and concede that countries with healthy public finances should be prepared to let budget deficits rise, if necessary, to cushion the impact of slower foreign and consumer demand.

Belgian Mr Didier Reynders, who is chairman of the group of EU finance ministers, said scrutiny of other states would remain behind closed doors.

A spokeswoman for Mr McCreevy was asked afterwards for her interpretation of Mr Reynders' comment. 'Maybe they have learned from their experience of our recommendation,' she hedged, although she added that as far as she knew, Ireland's censure had not been specifically discussed at the ECOFIN meeting, and that the Belgian finance minister may not necessarily have been referring to Ireland.

Mr Reynders refused to single out states where budgets were under pressure. It is known, however, that the Eurogroup's attention has focused on Italy, Germany, France and Portugal, where slowing growth has threatened the ability of government to meet strict budget deficit targets agreed this year.

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