The European Commission will produce its proposals for this year's broad economic policy guidelines next week after intense discussions with Irish officials.
Failure to comply with last year's guidelines resulted in a formal recommendation of censure against Ireland. The guidelines are being dealt with much more carefully this year and Irish officials have already met and had discussions with the Commission.
The Commission will publish its proposals for all 15 member states on April 25th. They will then be discussed by the Economic and Financial Committee in May before going to the finance ministers for their consideration in June.
In its discussions with the Commission, the Department of Finance has underlined the different economic circumstances this year with growth expected to almost halve due to the US slowdown and the foot-and-mouth outbreak.
To begin with the Commission took no account of these. But insiders say the "overall environment will be taken into account". They also stress that changes in the economic situation and in the world environment do not mean there should be a change in policy mix.
This could cause problems for the Government. The Commission is already closely examining the Irish economic performance in 2001. It has called for a surplus of 4.7 per cent to be run this year in line with 2000.
Economists warn that the surplus may be far less than the Government's target of 4.3 per cent which initially provoked the Commission.
This is likely to mean tough choices for the Minister for Finance, Mr McCreevy, who is already running overall day-today Government spending increases of 21 per cent.
And next year could be more difficult. If the Commission has its way, the Budget - irrespective of an imminent general election - should look parsimonious compared with the previous two.
