European Union finance ministers might soften the formal reprimand being prepared for Ireland next month over its budget policies, EU monetary sources said yesterday.

Ireland had few friends at talks yesterday between senior EU treasury and central bank officials but some felt the words used in a draft "recommendation" to Dublin to bring its budgetary policies into line with EU guidelines were too strong.

"It will be toned down," one official said. But he added he expected finance ministers at their next meeting on February 12th to agree to the reprimand despite opposition from Ireland itself and some smaller EU countries.

The European Commission proposed last week that Dublin be issued the recommendation "with a view to ending the inconsistency of the expansionary aspects of budgetary plans" by using policy guidelines agreed at EU level last year.

The unprecedented move followed the Minister for Finance Mr McCreevy's announcement in December that he would cut taxes and raise benefits this year in a budget that economists unanimously agreed was expansionary.

The Commission declined to specify whether it wanted the tax cuts reversed or to give any details about what it was recommending.

In Berlin yesterday, the German Finance Minister, Mr Hans Eichel, repeated his criticism of the Government's budgetary policy.

"Ireland is not doing in this phase what one might expect from a country with high inflation," Mr Eichel told a news conference in response to a question. "Each individual euro zone member is responsible for its own fiscal policies. But members have to make sure not to pour oil on the fire," Mr Eichel said.