Harney talks down row on fiscal stance

The Tanaiste, Ms Harney, yesterday sought to move on from the censure controversy and underlined her commitment to EU enlargement.

Asked if the Government would take on board the views of EU finance ministers, she said the Government always took advice on board "but at the end of the day fiscal matters are a matter for the member-state. They are not centrally organised like interest rates and monetary policy".

The Tanaiste added that public spending on health and old age pensions needed to be increased and the next budget would have to continue to reduce the tax burden on working people.

"I think in the area of public spending we've got to be cautious but we need to invest in the economy. Everybody knows our transport infrastructure is inadequate, our roads infrastructure is inadequate, we have to make those investments and we also have to ensure we have water and sewerage waste management facilities. All of that requires us to spend money. But I think we do need to save money as well and I think some of the policies that will be announced in the Finance Bill will encourage greater savings and take money out of the economy," she said.

This did not mean the Government was ignoring the censure, Ms Harney said. "They are not telling us we can't spend. What they are saying is that the economy is over-heating and I think we will see by the end of this year that Irish inflation will be down to about 3.5 per cent".

But Fine Gael deputy Mr Alan Dukes said Mr McCreevy had brought unnecessary embarrassment to the State by incurring a reprimand from the Council of Ministers.

The Labour Party leader, Mr Quinn, said the former British prime minister, Mrs Thatcher, was the only person before Mr McCreevy who equated the national interest with diplomatic isolation in Europe.

"Minister McCreevy may claim that he was defending the national interest, but it is not in the national interest for Ireland to find itself without a friend or ally in Europe," he said.

However, the Green Party MEP, Ms Patricia McKenna, condemned what she described as a "most serious interference with one of the few economic powers left to Ireland". She advised the Minister not to follow up on this censure at a future stage.