Quinn rejects Harney claim on cost of water rates abolition

THE Minister for Finance, Mr Quinn, last night vehemently rejected suggestions from the leader of the Progressive Democrats, Ms Mary Harney, that the abolition of water rates was an act of "electoral folly" which would impose massive hidden costs on an incoming government.

"It's not true. Expenditure for the first three months, as indicated from our Exchequer returns, is in on line or slightly below what we had committed," Mr Quinn said.

"I made it very clear in regard to the nurses' pay deal, which was accepted by the Government on the foot of a Labour Court recommendation, that the extra £49 million had to be found from within the existing budgets. And we have not stepped outside our budget commitments at all. The budget figures prior to Christmas and figures announced in the content of the Budget on January 22nd and the revised Book of Estimates clearly indicate that," he said.

And Mr Quinn made clear that, for Labour, the possibility of a coalition with Fianna Fail was simply not on the cards. The Government parties had made a decision to present themselves as a partnership government which deserved to be reelected.

Mr Quinn was in Noordwijk on the Dutch coast for an informal meeting of EU finance ministers. Although largely concerned with technical issues to do with the single currency, ministers will also want the meeting to send a strong signal that its introduction is still very much on course, a message all here see as having been reinforced by the decision of Chancellor Helmut Kohl, to seek reelection next year.

The meeting is likely to agree on the next year's schedule for the decision on the first wave of participants in the euro.

A Commission spokesman said yesterday that he expected final figures for the out turn of 1997 by the end of February.

The Commission and the European Monetary Institute would then require about two weeks to come up with their opinions on the preferred participants, which would then go to MEPs and national parliaments.

Some six weeks later, probably at the end of April or beginning of May, finance ministers and then heads of government would then approve the list. Any further delay, he warned, could cut the time required to establish the new European Central Bank too fine.

Ministers are also due to work on the text of a legal resolution for the Amsterdam summit in June, encapsulating the political decisions taken in Dublin in December. Although largely technical, a disagreement over the meaning of one aspect of the Stability Pact may cause some problems.

Italy insists a Dublin reference to an annual ceiling of 0.5 per cent of GDP for the fine on countries exceeding the 3 per cent deficit limit means that the fines for subsequent years are also not cumulative beyond 0.5 per cent. Germany, France, and others, including Ireland, insist there is no cumulative upper limit.

Despite a treaty obligation to do so, a country which met the criteria for the single currency, but did not wish to join, would not be forced to participate against its will, EU Commissioner, Mr Yves, Thibault de Silguy said on arriving for the meeting.