When the EU Economic Affairs Commissioner, Mr Pedro Solbes, arrives in Dublin tomorrow evening, he will have a single mission - to mend fences with the Government after the EU's unprecedented reprimand of Ireland this week.

A formal recommendation criticising last December's Budget was adopted without a vote at Monday's meeting of EU finance ministers in Brussels.

The Commissioner will have breakfast with the Minister for Finance, Mr McCreevy, on Monday morning and will meet the Tanaiste, Ms Harney, later that day.

Mr Solbes has been at pains in recent days to insist the reprimand will have no impact on Ireland's standing within the EU and will not influence negotiations on other issues. And he has stated explicitly the Commission will not seek to punish Ireland, even if Mr McCreevy ignores this week's recommendation.

The resentment felt by some EU states over Ireland's tax policies has never been a secret, but Mr Solbes has repeatedly dismissed any link between the tax issue and this week's censure. He insists independent economists concluded that December's Budget was out of line with the Broad Economic Policy Guidelines agreed by the Taoiseach and the Minister for Finance.

However, Belgium's outspoken Finance Minister, Mr Didier Reynders, said openly what many have long suspected - that this week's reprimand was partly motivated by irritation among our partners over Ireland's low corporate tax regime. Mr Reynders, who is chairing the Eurogroup - the 12 euro zone finance ministers - for 2001, admitted this week the official explanation for the rebuke represented only half the truth.

"Both debates are interwoven, of course. The first is conducted openly and that concerns the overheating of the Irish economy. But you can sense very clearly there is something here that is not mentioned openly and that concerns the financial relationship between the EU and a country or region," he said.

Both Mr Reynders and Germany's deputy Finance Minister, Mr Caio Koch-Weser, have implied that Ireland has been using transfers from Brussels to finance the low tax regime that has attracted much investment from abroad.

"If they lower taxes, one does wonder who is actually paying for it . . . Germany is a net contributor to the EU," Mr Koch-Weser said after Monday's meeting of EU finance ministers.

Irish officials acknowledge privately the dispute between Mr McCreevy and the EU has damaged relations with our EU partners.

And Ireland's friends in the Commission fear the attention the dispute has drawn to Ireland's economic and tax policies could have far-reaching consequences that can only be to our detriment.

As a small member-state, Ireland can only protect its interests in the EU by forming alliances with more powerful states.

More often than not, our interests coincide with those of one or more of the larger states, making a lone stand unnecessary.

But occasionally, an EU proposal will have a bigger impact on Ireland than on other member-states and at such moments, a reservoir of goodwill becomes an essential weapon in our negotiating armoury.

ONE such proposal was announced this week, just one day after the reprimand, when the EU Agriculture Commissioner, Mr Franz Fischler, put forward measures to reduce beef production in the EU. The Minister for Agriculture, Mr Walsh, has complained that the measures would have a disproportionate impact on Ireland and he predicts "tough and difficult" negotiations over the coming months.

Cutting beef production may be only a precursor to a more radical overhaul of EU farm policy that could mean dramatic changes to the Common Agricultural Policy.

EU farm subsidies will be reviewed next year and there is growing pressure, particularly in Germany, to use subsidies to promote quality rather than quantity.

Irish farmers could, in the long run, benefit from such a shift of emphasis, but the nature of the changes and how they are managed will have an enormous impact on farm incomes.

After the events of the past few weeks, Ireland's diplomats will need all their expertise if they are to persuade our partners that this State is committed to realising a shared vision of Europe as well as protecting our national interests.