The Minister for Finance is in hot water again, apparently in complete political isolation among his peers in Brussels, the European Commission and the European Central Bank.

Mr McCreevy has certainly taken them on. Faced with an unprecedented reprimand for Irish economic polices despite being "the best pupil in the class", he has simply told the Commission and the other European capitals where to go.

In doing so the Minister is certainly winning some short-term political advantage at home.

Economically, of course, Mr McCreevy does have a point. Irish inflation is on the way down, as figures released on Friday showed.

Consumer price rises are now running at an annual rate of 5.2 per cent from a peak of 7 per cent towards the end of last year.

In the Budget, the Government needed to deliver large-scale tax cuts to keep social partnership on course and to provide for massive investment to bring infrastructure even close to average European levels.

The Minister can also point out that he is taking further steps to reduce inflation. He has already cut VAT and is ready to announce a small-savings scheme which should encourage consumers to put some money away rather than spend it all.

Defending a generally popular Budget is also a savvy move. After all, few votes would be won in taking back some £400 million (€508 million) of tax cuts which many are expecting in April.

The Europeans appeared to give at least some credence to some of these arguments. They agreed to take references to precise measures out of the proposed censure to be considered by finance ministers today. They also deleted mention of £400 million from the formal recommendation and left it simply in the preamble.

Having done this they expected the Government and Mr McCreevy to be grateful. But an article by the Tanaiste in the Financial Times last Monday was interpreted as a veiled threat to the passing of the Nice Treaty and helped to harden attitudes against Ireland in Europe.

If Mr McCreevy was going to have any further support at the meeting this morning - which was probably unlikely - it was now gone.

His problem is that the Government has agreed to far more than most people realised when the State accepted the Maastricht Treaty. At that time the rhetoric was that control of interest rates and the currency would move centrally to Frankfurt but domestic budgetary policy would be entirely decided in Dublin.

In reality however, things were less clear. Both Mr McCreevy and the Taoiseach, Mr Ahern, have signed up to broad economic guidelines in each of the last three years.

These are designed to give support to the euro and ensure that broadly similar polices are in place across the zone. But as the EU Economic Affairs Commissioner, Mr Pedro Solbes, never tires of pointing out, these have been ignored by Ireland for each of the three years.

Our European partners have now run out of patience and hence the formal reprimand for Mr McCreevy when he meets with his peers in Brussels today.

Our European critics do have a point and, undoubtedly, if the guidelines were being ignored by a bigger country such as Germany, despite united pressure from all other capitals, we would be worried.

The European Commission wants the Minister to put up his hands after the meeting today and promise to try harder next time. It remains to be seen whether he will be willing to go quite that far.

What will be required is some form of double speak which allows him to play to the gallery in Ireland while simultaneously keeping Europe happy.