EU finance ministers give statement frosty reception

The Swedish Finance Minister, Mr Bosse Ringholm, leaned across and whispered into the ear of Mr Pedro Solbes, the EU Economic Affairs Commissioner. Mr Solbes laughed heartily at the remark, an apparent reference to the Minister for Finance, Mr McCreevy. The Commissioner was not alone in regarding Mr McCreevy's statement to yesterday's meeting of EU finance ministers with derision. And he made clear that he was more interested in the Minister's future actions than in his colourful words.

"We have to take comments into consideration. But we have to take facts into greater consideration," Mr Solbes said. He declined to say what action the Commission would take should Mr McCreevy ignore yesterday's formal recommendation over December's budget. But some of our EU partners fear that, if Ireland makes a mockery of the EU's system of economic policy co-ordination, they could be forced to adopt stricter guidelines.

A number of member-states are uneasy about Mr Solbes's proposal for enhanced policy co-ordination, which would include a set of rules to be applied by all finance ministers in drawing up their budgets. But they fear that, if Mr McCreevy does nothing in response to yesterday's reprimand, the existing system could fall into disrepute.

The German Deputy Finance Minister, Mr Caio Koch-Weser, expressed the frustration of many of Mr McCreevy's colleagues when he questioned how Ireland could afford to cut taxes.

"If they lower taxes, one does wonder who is actually paying for it . . . Germany is a net contributor to the EU," he said. Mr Solbes rejected an accusation by Mr McCreevy that the Commission had leaked a text of yesterday's recommendation. The Commissioner acknowledged that the large number of people who had seen the document legitimately made it difficult to trace the leak.