The European Central Bank (ECB) has called on the Minister for Finance, Mr McCreevy, to ensure that "the letter and the spirit" of the Stability and Growth Pact are respected during Ireland's EU presidency.
As incoming president of Ecofin and the Eurogroup of euro-zone finance ministers, Mr McCreevy attended yesterday's meeting of the ECB's governing council in Frankfurt.
The ECB president, Mr Jean-Claude Trichet, said that EU finance ministers must keep a promise they made in November to allow sanctions to be triggered if France and Germany fail to cut their budget deficits.
"The Stability and Growth Pact exists. The letter and the spirit of the Stability and Growth Pact exist. We consider that there have been commitments made in Ecofin not just by two countries, but by the council itself, that if these commitments are not met, the proper sequence will be followed," he said.
Mr Trichet declined to comment on the European Commission's expected legal challenge to November's decision.
The ECB left interest rates unchanged at 2 per cent despite calls for a cut to boost growth and halt the euro's rise against the dollar.
Mr Trichet said the meeting had considered the exchange rate in making its decision; but he predicted that euro-zone exports would continue to grow, despite the euro's strength.
Germany's economics minister, Mr Wolfgang Clement, expressed disappointment at the ECB's decision to leave rates unchanged. He said that a rate cut could boost economic growth and help exporters who were suffering the negative effects of the strong euro.
