EUROPEAN REACTION:THE EUROPEAN Commission dismissed Fine Gael claims that the Budget was the work of a "puppet Government" as it declared the measures unveiled by Minister for Finance Brian Lenihan to be in line with the terms of the EU-IMF bailout deal.
As the IMF welcomed the €6 billion package of cuts and tax increases, the commission rejected the assertion of Fine Gael finance spokesman Michael Noonan that the Government was merely doing in the Budget what it was told to do by its international benefactors.
“No, this is the Budget of the Irish Government approved by the Irish parliament . . . which is the sovereign parliament of the Republic of Ireland,” said the spokesman for economics commissioner Olli Rehn when asked about Mr Noonan’s remarks.
The Budget followed extensive dialogue between the Government and the commission over the terms of the four-year economic plan and Mr Rehn endorsed the €6 billion target weeks ago.
The measures came little more than a week after the conclusion of intensive talks on the bailout deal with the commission, the European Central Bank and the IMF, whose agreements with the Government reflect the targets set out in Mr Lenihan’s plan.
The Budget was a very important and successful first step towards implementation of the EU-IMF programme and the commission recognised its “social impact”, Mr Rehn’s spokesman said.
“The Budget is in line with our agreement with the Irish authorities, to answer your question straight. So far the approval process of the Budget is on track. This is a process, so the vote yesterday is a first step,” he said.
“It is a tough Budget, no doubt about that. It is an ambitious and indispensable consolidation Budget but it is tough and of course the commission acknowledges the social impact of some of the measures contained in this budget, no doubt.”
It represented an effort to lay the ground for a sustainable economy, but the spokesman added that it was important to recall that the enactment process involved many votes.
“The votes will continue this week including on the social expenditure legislation and various other types of expenditure legislation and we will be in a position to give a final and full assessment of the compliance with the memorandum of understanding and conditionality in about a week after the outcome of these votes and also the detailed analysis of the documents submitted.”
In a statement on Tuesday night, the IMF welcomed what it described as “approval” of the Budget by the Dáil. “This is a clear sign of Ireland’s strong commitment to tackle its problems and harness the impressive growth potential of this open and dynamic economy,” it said.