The European Commision’s recommendation criticising Irish budgetary policy is contradictory and is based on the wrong premise, according to the Minister for Finance Mr McCreevy.
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Mr Charlie McCreevy
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Speaking to the Oireachtas Joint Committee on European Affairs today, Mr McCreevy said Ireland was adhering to the Broad Economic Policy Guidelines (BEPGs) set down by the Commission.
He argued policy aspirations for the entire EU were not consistent with EC guidelines specific to the Irish economy's development.
Mr McCreevy also said Ireland had not been been reprimanded and that the recommendation had not been put to a vote as widely reported.
"The Council Recommendation, as adoptedby the Council, remains a recommendation only. It is not a reprimand as it has been incorrectly referred to in a number of media reports," Mr McCreevy said.
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"I would also point out that contrary to much of the media reporting, the Council didnottakeavoteon this issue and therefore it is wrong to say that the other member states voted against Ireland."
The BEPGs, which are specific to each member state, require that Ireland seek economic stability. Mr McCreevy said that measures including the continuation of social partnership; the reduction in inflation and the national debt; and the prudent spending of budget surpluses were consistent with these guidelines.
He said the BEPGs also encourage Ireland to stimulate labour supply through tax incentives. "It is not easy to see how see how one can be taken to task for a response in fiscal terms which seeks to adhere to the thrust of the BEPGs in the first place," said Mr McCreevy.
He said the Commission’s own figures indicated that Ireland has been pursuing a contractionary budgetary policy and compared to other EU countries Ireland had lower inflation and was spending less as a proportion of its GDP. Mr McCreevy has written to the Commission outlining claims.