The Minister for Finance, Charlie McCreevy, has again defended the Government's economic policies, despite today's rebuke by his EU colleagues. He said that there were a number of people who would say that the way we have conducted our economic affairs in recent years should be copied by more member states in the European Union. He said this would lead to a much stronger European growth rate and a stronger euro. The Tánaiste, Mary Harney, said that there was no doubt that Ireland's is the most successful economy in Europe.
Earlier today European Union finance ministers in Brussels formally reprimanded Ireland over its inflationary budget policy. It is the first time that an EU member has been admonished in such a way. The Minister for Finance, Charlie McCreevy, was the only dissenting voice. He said that the Government did not believe such a proposal was warranted. The reprimand is seen as a test case of the limits of national policymaking in the euro zone. However, the EU ministers have no power to force Dublin to conform to the Commission's wishes.
Mr McCreevy earlier hit back at the EU over its criticism of the Government's handling of the economy. In a BBC interview, Mr McCreevy said that the EU had gone too far and that the country's reputation had been damaged. He made an unflinching defence of his budgetary policy, telling the other 14 finance ministers that the censure motion was unjustified. He said that the European Commission criticism was based on the wrong premise. Far from going against the broad economic policy guidelines, Mr McCreevy said that his budget followed them by attempting to follow social partnership and stimulate labour supply by tax cuts. He also argued that his budget was designed to reduce inflation. He said that he would have to wait and see if any budget adjustments were needed over the coming year. Mr McCreevy added that he was not disappointed that all 14 ministers voted against Ireland and said that the experience left him neither more nor less Eurosceptic. He said that the budgetary policies were appreciated in Ireland and were correct.
However, Belgian Finance Minister, Didier Reyndrs, the Chairman of the Euro Group, said that Ireland should either cut spending or not implement tax cuts. Before the meeting, a number of ministers signalled that they intended to support the Commission line. The Austrian Finance Minister told reporters that some of the Irish policies were "not rational". French Foreign Minister, Laurant Fabius, said "it is true there is a problem (with Ireland) but we will discuss it today." Luxembourg's Prime Minister, who deals with the finance portfolio, noted there were many positive aspects to the Irish economy but said that in the monetary union, all rules had to be respected. The Commission's spokesman in London, Geoff Martin, said that the rebuke was just a gentle reminder to Ireland that it has duties to its other partners in the Eurozone.
