FG sees budget plan as 'handing over sovereignty'

EUROPEAN COMMISSION legislation requiring euro zone states to submit their budgets to Brussels for pre-approval would mean “handing over sovereignty” to Europe, Fine Gael leader Enda Kenny claimed in the Dáil.

He said it would mean handing over the running of Irish affairs to EU “peer groups” and would depend on their “political whim”.

Taoiseach Brian Cowen said if Mr Kenny was concerned about the need “for this country to retain control and manage its own affairs then he should avoid flip-flopping on his basic economic policies”.

During sharp exchanges about the EU Commission’s sweeping proposals which were unveiled yesterday, Mr Kenny told Mr Cowen: “I won’t be lectured by you.”

The Taoiseach later told Fine Gael and Labour finance spokespersons that an EU taskforce would discuss the legislation, and Minister for Finance Brian Lenihan would be Ireland’s representative on the body.

Fine Gael spokesman Richard Bruton asked if Mr Cowen was considering the “legal and profound changes” which would require the Irish budget to be approved first by other countries’ finance ministers.

Labour finance spokeswoman Joan Burton pressed the Taoiseach about funding for the Greek bailout and the €750 billion package for weakened euro zone countries.

When Mr Cowen said the Minister for Finance would be on the EU taskforce, Mr Bruton asked if there would be “prior discussion” in the Dáil before the Minister “adopts on behalf of Ireland a fixed position that could become cemented”.

The Taoiseach said “we will give ample opportunity for everyone to comment during the course of the discussions in the event of a report being obtained” from the taskforce.

During Leaders’ Questions, Mr Kenny expressed concern about the commission’s proposals which he described as “quite opaque” and said it would mean “the political whim, colour or bias of the council at any time could influence what is being talked about here”.

He said “other countries might well be jealous of our low corporation tax rate” and could say “that we would have to make changes in public pay or corporation tax or adjust matters that might not be to our liking”.

Mr Kenny said he wanted an assurance from the Taoiseach “that in no circumstances will the Government hand over sovereignty of the running of our economy to anybody else who might have a different view”.

Mr Cowen retorted that the leader of the Opposition should stop “flip-flopping” on his basic economic policies. The Taoiseach said “we have to maintain our credibility at home and abroad, and the Government will take the decisive action that is necessary”.

Mr Kenny repeated a Fine Gael proposal from last year that an independent fiscal advisory council be established to discuss the preparations for the budget where money could by agreement be shifted from one department to another and “leave us in control of our own economic affairs, determining what our budget should be and deciding what the impact on people should be”.

Mr Cowen said Mr Kenny “flip-flops every couple of months”. In December the Fine Gael leader said there should be savings of €3.5 billion this year, “and now he is talking about €2 billion”.

“We will stick to the plans that we have agreed,” said Mr Cowen.