The Minister for Finance will defy the EU's latest call for Government action to offset the inflationary effect of December's Budget.
At a meeting of EU finance ministers in Luxembourg yesterday, Mr McCreevy approved this year's Broad Economic Policy Guidelines but made clear that he rejected a call, which echoed the wording of February's unprecedented EU Budget reprimand, for "countervailing measures" during the current fiscal year.
"The Budget plans for this year have been set out and I will be doing nothing else," he said.
In a statement that was recorded in the minutes as a unilateral declaration by Ireland, Mr McCreevy referred to February's reprimand and his rejection of the analysis on which it was based.
"In relation to the adoption by the council of the 2001 Broad Economic Policy Guidelines, Ireland draws attention to the views expressed by it at the council on February 12th, 2001, on the appropriateness of the analysis in the council recommendation in regard to the Irish economy. Ireland further notes that the [guidelines] are based on the latest but uncertain macro-economic forecasts that may no longer pertain when the 2002 Irish Budget is presented in December 2001," he said.
Mr McCreevy acknowledged he had failed to win any major concessions on the wording of this year's guidelines and said that changes to the Commission's draft text meant "very little".
The EU Economic Affairs Commissioner, Mr Pedro Solbes, said the new wording did not represent a watering down of the reprimand. He acknowledged the Government did not share the Commission's anxieties about overheating in the Irish economy. But he said it was too early to say if economic developments had made the call for action redundant.
"It is true that conditions today are in some aspects different from conditions before. But we don't have sufficient data to present our conclusion to council. We will make our report in September," he said.
The Commission's draft called on the Government to "remove the inconsistency with the 2000 Broad Economic Policy Guidelines, engendered by the Budget plans for 2001, with countervailing Budgetary measures during the current fiscal year".
The draft accepted by EU finance ministers yesterday, which will be sent to heads of government for approval at next week's summit in Gothenberg, in Sweden, says the Government should "use countervailing Budgetary measures during the current fiscal year to better align the Budget plans for 2001 with the 2000 Broad Economic Policy Guidelines".
The Commission is due to report in September on Ireland's compliance with February's reprimand. But Mr McCreevy said yesterday as the report would be issued two months before his next Budget he was relaxed about what it may conclude. "I'm certainly not losing much sleep over it," he said.
Mr Solbes denied that the Budget reprimand would persuade many Irish voters to reject the Nice Treaty in tomorrow's referendum, which he said was entirely a matter for Irish citizens.
"I think the real debate is about Nice and not about the Broad Economic Policy Guidelines or about the recommendation. The debate ought to be about the future of the Union, enlargement and the Nice Treaty," he said.
Britain's Chancellor of the Exchequer, Mr Gordon Brown, yesterday claimed victory in a row with the European Commission about how much money he could spend. Attending the Ecofin meeting in Luxembourg, Mr Brown said he had succeeded in getting a draft of the Commission's policy guidelines altered to remove a reference to the total level of British public spending in 2001/02.
