Brussels warning on 'volatile' tax intake and overspending
The European Commission has said that while Budget 2017 is "broadly compliant" with EU rules, Ireland risks missing its 2017 deficit target by 0.1pc of GDP, or around €255m.
While the potential breach is not serious and won't lead to any penalties, the EU has advised the Government to use any cash windfalls to pay down the national debt.
Commission staff pointed to "recurring overspending compared to government plans in the past several years" and "volatile, still uncertain, tax intakes".
But the Department of Finance said this was down to "a number of technical issues" in the EU's calculations.
"We disagree with this approach and are taking it up with the Commission," a spokesman said. The department said it still intended to balance the budget by 2018 and would continue "prudent management of the public finances".
However, the EU did not take into account the garda pay deal or any successor to the Lansdowne Road Agreement in its assessment. It will look at public sector pay as part of its next post-bailout review of our economy, due at the end of this month.
Ireland was one of 10 countries found to be compliant or broadly compliant with EU rules yesterday. Eight countries - including Italy, Belgium, Cyprus, Spain and Portugal - were told they risked breaking rules.