The Minister for Finance, Mr McCreevy, has said that he will not be bound by the European Union's Broad Economic Policy Guidelines when he prepares next month's Budget.
Mr McCreevy said he would note the advice of the Commission in the same way as he notes advice from such bodies as the Economic & Social Research Institute (ESRI) or from media commentators.
"We are not bound by the Broad Economic Policy Guidelines because, as their name suggests, they are broad and they are guidelines," he said.
Mr McCreevy was speaking in Brussels after a meeting of EU finance ministers accepted a Commission report acknowledging that fears of overheating in the Irish economy that led to this year's EU budget reprimand have not been fulfilled. Mr McCreevy said it was important that the rules are applied as rigorously to larger countries such as Germany and Italy, which are facing a potential budget conflict with the EU, as they were to the Republic.
"There will be considerable interest in how these rules are applied to the larger member-states. The more important question is how the markets respond if they are not applied," he said.
The Economic Affairs Commissioner, Mr Pedro Solbes, told the ministers that the reprimand of the Republic had set an important precedent and he said the Commission was prepared to use the measure against other states in the future.
The meeting discussed a report by the Tax Commissioner, Mr Frits Bolkenstein, examining the possibility of establishing a consolidated European corporate tax base. Mr Bolkenstein has made clear that he does not favour tax harmonisation but Mr McCreevy said he was concerned that the debate could lead indirectly to harmonisation.
He said that the right of member-states to set tax rates was as much a matter of national sovereignty as of economic advantage.
"It goes to the core of the democratic principle of the nation state. People in member-states elect governments and change them. They want those governments to respond to their needs. It is a fundamental question of national sovereignty. There's hardly a more fundamental question," he said.
