Ireland Receives Expected EU Reprimand

Ulrika Lomas, Tax-News.com, Brussels

13 February 2001

As expected, the ECOFIN Council (EU Finance Ministers) meeting in Brussels yesterday said the Irish government should take "countervailing budgetary measures" during the current fiscal year to bring its 2001 budget into line with the EU's broad economic policy guidelines.

Charlie McCreevy, the Irish finance minister, accused the European Commission of leaking drafts of the recommendation to the press and said that the decision was "unwarranted, disproportionate and lacking in even-handedness."

The 'recommendation' issued by ECOFIN has no teeth, and there are no measures against Ireland that can be taken by the EU; at least, not official ones. However it's well known that 'communautaire' behaviour is rewarded in all kind of ways, while there are many subtle techniques that Brussels can use to 'punish' a country it thinks is out of line.

The ministers' formal recommendation gave no specific policy advice to Dublin, but quoted Commission estimates that restrictive measures equivalent to at least 0.5 per cent of gross domestic product would be needed to offset the stimulus contained in Ireland's 2001 budget plans.

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