Charlie McCreevy, Best performing economy in Europe
The Tánaiste has said that she believed the European Commission, in criticising Charlie McCreevy's Budget, had misjudged the situation in Ireland. Mary Harney made her comment in a statement this evening. The Commission has formally recommended that Ireland revise its economic policy to reduce the risk of rising inflation. The employers' group IBEC, meanwhile, described the Commission's criticism as "excessive and alarmist".
The 20-member Commission, meeting in Brussels, said that Ireland had breached agreed EU economic policy guidelines. Irish officials and Ireland's member of the European Commission, David Byrne, have argued that the censure is not justified. It is the first time the Commission has singled out a member country for censure. The Commission cited overheating of the economy and risks of inflation.
Speaking on The News at One, Fine Gael's Michael Noonan said that the Government was putting our prosperity at risk. The Labour leader, Ruairí Quinn, said that the size of the tax reductions in the Budget was designed to provoke the wrath of the Commission.
The Government is in trouble because it is accused of pursing inflationary policies in a number of budgets including the December one. Under Article 99.4 of the Maastricht Treaty, Euro Zone countries can formally reprimand a member state deemed to be behaving contrary to agreed EU economic policies or threatening the smooth functioning of monetary union. Ireland is the first single currency member to receive formal criticism.
Mr McCreevy will no doubt defend the Irish case, pointing out our inflation may have peaked, we have the best-performing economy in Europe and some of the contentions measures in the budget were necessary to preserve social partnership.
