Germany and France accused of flouting rules

France and Germany were condemned in the Dáil for their "flagrant breach" of EU financial regulations.

Former Labour leader and Minister for Finance, Mr Ruairí Quinn hit out at the difference in the treatment of the "big two" states and smaller countries like Ireland and Portugal for breaches of the Growth and Stability Pact.

Mr Quinn said such behaviour "does no good for the institutions" and "there must be one law observed by all".

Under the Growth and Stability Pact, EU member-states can be penalised if their budget deficits exceed 3 per cent of Gross National Product (GNP).

Mr Quinn said the "apparent impunity exercised by France and, to a lesser extent, Germany, in their flagrant breach of the pact contrasts with the way in which this country and Portugal, among others were sanctioned".

He added that "we cannot be seen to allow large economies like France to continute to flout the pact and its rules".

The former Labour leader, who "strongly welcomed" the appointment of Frenchman Mr Jean-Claude Trichet to succeed the outgoing German president of the European Central Bank, Mr Wim Duisenberg, said that "if it is the case that the terms of the pact are too restrictive, they should be changed in the light of present circumstances".

The Labour TD for Dublin South-East was speaking during a debate on last week's European summit and the ongoing Inter-Governmental Conference for a new European Constitution.

Much of the debate centred on European defence and the Fine Gael leader, Mr Enda Kenny said that Ireland "should grab the opportunity to become one of the architects" of the new security and defence policy "rather than to settle for an architecture designed by others".

He said that "this is our chance. We are a confident modern national well able to take our place among the nations of the world," and he added that "Ireland is no longer neutral, we are merely unaligned".

However, the Minister for Foreign Affairs, Mr Cowen, who said Ireland's position on common defence was very clear.

"We cannot participate in an EU common defence unless the people decide so in a referendum."