Thursday 21 September 2017

Commission condemns third German leak on Irish programme

Finance Minister Michael Noonan said the Spanish bank bailout would 'provide much needed confidence and stability'
Finance Minister Michael Noonan said the Spanish bank bailout would 'provide much needed confidence and stability'
Thomas Molloy

Thomas Molloy

THE European Commission said the third leak of a sensitive report about the Irish economy from Germany's parliament in just over six months was "extremely regrettable, unfortunate and irresponsible".

The latest leaked report, on the Government's efforts to implement the bailout programme, came from the Bundestag's powerful finance committee.

Last November, Reuters used leaks from the same committee to reveal that Finance Minister Michael Noonan planned to raise VAT by 2pc.

In February, another report suggested Ireland might need a mini-Budget as growth was stagnating.

The latest leak was of a draft report by the commission on Ireland's progress in implementing the bailout terms. The report, which is due to be officially published in three weeks' time, shows that things remain broadly on track but contained a warning that the Government must ensure reforms are fair.

Risks

"The difficulties experienced in the implementation of the new household charge... provide a reminder of the risks that the popular support for continued consolidation and reform might wane," the report says, according to the 'Irish Times'.

"In order to minimise this risk, it is essential that the burden of the necessary consolidation be fairly and equitably shared."

The report also reiterated previous concerns about government delays in introducing insolvency legislation and said officials were looking at overspending in the departments of health and education.

The leaked report questioned the decision to shrink the public sector, rather than cutting salaries. If the Croke Park deal fails to yield savings, further cuts to some pay grades may be necessary, it adds.

It is essential to ensure that new employees be subjected to new pension arrangements, it says. Calls for reform of the welfare sector are also repeated.

In the Dail yesterday, Taoiseach Enda Kenny said Mr Noonan presented the draft report to Cabinet on Tuesday.

Releases

A spokeswoman for the Department of Finance said the Oireachtas Committee on Finance, Public Expenditure and Reform received the draft report at the same time as the Bundestag committee.

The Government reached agreement with Brussels about simultaneous releases across Europe after last November's controversy when a leak from Berlin revealed that Mr Noonan planned to hike VAT by two percentage points.

Yesterday, European Commission spokesman Amadeu Altafaj described the most recent leak as "extremely regrettable, unfortunate and irresponsible" but insisted that the report was a European Commission staff paper and not a formal troika report.

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