German finance minister Mr Hans Eichel today criticised the Irish Government for cutting taxes and increasing spending in the face of high inflation.
He said the European Central Bank could only run monetary policy for the euro zone as a whole and individual governments had to use local means to tackle their own inflation problems.
"Ireland is not doing in this phase what one might expect from a country with high inflation," Mr Eichel told a news conference in Berlin in response to a question.
"Each individual euro zone member is responsible for its own fiscal policies. But members have to make sure not to pour oil on the fire. This is the case with Ireland, I think," Mr Eichel said.
Asked if he thought further measures should be taken against Ireland, however, he said: "The Commission has done what had to be done."
A spokesman for the Department of Finance declined to comment on Mr Eichel's remarks but has previously robustly defended its budget plans.
Mr Eichel reiterated that the ECB's task was to set policy to further price stability in the zone as a whole and said individual governments had to look to other policy instruments at their disposal, including fiscal and wage policy, to keep local inflation in check.
Reuters