Fine Gael 'is split' over EU bid to regulate budget plans
IRELAND will be told to stick to making budget cuts next month as part of an EU review of longer-term spending plans.
The EU's proposals to increase supervision of member states' budgets appeared to cause divisions within Fine Gael (FG) yesterday.
FG leader Enda Kenny last week warned of a threat to sovereignty from the European Commission's proposals. FG deputy leader Richard Bruton claimed the peer review proposals, where other EU states could examine our budget, "could jeopardise Ireland's low rate of corporation tax".
But FG's european affairs spokeswoman, Lucinda Creighton, said she was "very much in favour" of the EU proposals -- although she shared the concerns of her party leadership about the need for an enhanced budgetary process in the Dail.
"I don't have any concerns about sovereignty being eroded on what to me is the next logical step," she said.
"I don't have concerns about the corporation tax issue," she added. Meanwhile, Finance Minister Brian Lenihan last night said the State's €1.3bn loan to Greece will be repaid when economic conditions in that country improve.
Greece received its first batch of loans worth €14.5bn from 10 eurozone countries yesterday, as part of an overall package of €30bn. Ireland did not contribute to this first tranche of funding but Mr Lenihan said it is likely there might be some "frontloading" of our overall contribution. Mr Lenihan also stressed the Government's plans to go ahead with €3bn in cuts next year
"The €3bn adjustment for next year's Budget will challenge us but we will achieve it because we must; because it is the right thing for our country," he said.
Mr Lenihan said there are welcome indications that "we are beginning to turn the corner".
"Recent economic data and a range of other indicators show that the economy is stabilising," he said.
Mr Lenihan has been roundly praised in Brussels for taking early austerity measures but burgeoning public debt levels, especially in the 16-nation single-currency zone, have raised alarm bells and led to market attacks on the euro.
After a meeting of EU finance ministers, European Commissioner Olli Rehn said he was sure "Ireland will be one of the countries in focus" when spending is reviewed across the union.
"Ireland will be closely followed because of its recent debt dynamics," he said.