Saturday 17 February 2018

Commission won't sign off on Budget until details published

Brendan Keenan

THE European Commission will not be able to sign off on the Irish four-year plan and the 2011 Budget until after they are published, Economics Commissioner Olli Rehn confirmed yesterday.

The Government has not yet been able to agree the details, raising the possibility that Brussels could object to aspects of the plan, even after the Budget has gone through on December 7.

Speaking in Dublin, Mr Rehn said that "hopefully" he would be able to endorse the plan "when we see the results".

"We are following the Budget process closely, but it is the responsibility of the Government to decide on the details," he told a meeting at the Institute of International and European Affairs (IIEA).

He said he looked forward to seeing a greater level of detail, "which the Government is due to provide shortly".

Coalition parties and individual ministers are still in disagreement about items such as pension cuts, property tax and water charges.

Earlier, Finance Minister Brian Lenihan said the commissioner was not here to dictate policy to the Government.

Yesterday's audience at the IIEA is believed to have beaten the previous record, set by former Soviet leader Mikhail Gorbachev.

Mr Rehn told the meeting that the general economic crisis "risked a financial and economic meltdown of the the euro area as a whole".

This was why the systems of economic governance had to be reinforced, he said. "Earlier and better surveillance of these imbalances across the EU could have helped to avoid the worst excesses," he added.

In Ireland's case, budget deficits had not been the problem, "rather, private debt has become public debt. The financial sector has misallocated resources in the economy and then stopped working. It needs reform," he said.

Mr Rehn told the meeting the original stability and growth pact, concentrating on limiting deficits to 3pc of GDP, was not broad enough in scope.

"It left non-fiscal economic imbalances outside the scope of surveillance. Ireland and Spain are unfortunate examples of this," the commissioner said.

Answering questions, Mr Rehn said it was important that the rights of small member states were not trampled on in the new, stronger system of economic governance in the EU.

"That is why we believe the imposition of sanctions on a country should be done under a voting system where the larger member states cannot block commission proposals on sanctions," he said.

Irish Independent

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