Brussels won't be calling the shots on Budget, says Cowen
THE Government will not have to clear the Budget with Brussels before announcing it in the Dail, Taoiseach Brian Cowen insisted yesterday.
However, Mr Cowen admitted there would be more scrutiny at EU level of our budgetary process as a result of a drive for closer monitoring of national budgets to prevent a repeat of the Greek debt crisis.
Under the contentious European Commission proposals, governments will examine each other's annual budgets in greater detail and ahead of their announcement.
The so-called 'peer review' process would not allow countries to be forced into making decisions, but pressure could be put on them about their projections for the following year.
Fine Gael claims the moves by the European Commission will erode our sovereignty and pose a threat to Ireland's corporation tax rate.
The Taoiseach said the proposal from the European Commission was about improving co-ordination between member states.
Mr Cowen said he had no concerns about the proposals and EU countries working more closely together.
He claimed the Government would not have to submit "the detail" of the Budget.
Mr Cowen said the closer EU scrutiny of the Government plans would not threaten our corporation tax rate.
"Let me be clear. The proposal that's from the commission is not, never has been, never will be any threat to our corporation tax rate," he said.
The commission's plans were in the pipeline for some time, but grew in importance because of the bailout for Greece and the setting up of a new emergency fund for countries in the euro.
Sticking to his claim that the plans pose a threat to our corporation tax rate, FG deputy leader Richard Bruton said there did need to be greater co-ordination.
"It has to be a decision by the Dail with full and open transparent scrutiny," he said.
Labour Party finance spokeswoman Joan Burton also wanted to know the Government's position on the European proposals.
Meanwhile, the row over how much say the EU should have in national budgets is escalating in Brussels.
The day after a proposal was tabled to overhaul how governments -- especially the soon-to-be 17 countries in the single currency zone -- conduct economic policy, political lines are being drawn in the sand.
The EU executive said not enough attention has been paid to skyrocketing public debt across the bloc and warned that budgets were over-dependent on "tax-rich" activities in the housing and financial sectors.
Labour MEP Proinsias de Rossa labelled the draft "conservative" and said the emphasis on budget cuts could strangle social services.
"We need governments in Europe, in particular in the eurozone, to be financially responsible, but this has to be coupled with social responsibility as well," he said.
"We have to be absolutely clear that no one benefits if member states are encouraged to make draconian cuts to services. The Irish Government must not endorse these conservative proposals as they stand," he added.
The commission wants to strengthen the preventive arm of the pact by getting governments to submit budget outlines to the EU in the first half of each year so Brussels can catch wayward spending before it damages the euro.
"A system of early peer-review of national budgets would detect inconsistencies and imbalances," the draft proposal says. But the Budget plans would be submitted before they were seen by parliaments.