The Minister for Finance has insisted the Eurostat decision will have no impact on budgetary decisions or the cost of water charges.
Michael Noonan admitted that the ruling by the EU statistical agency – that Irish Water must remain on the State balance sheet – was "embarrassing" for the Government.
However, he said there was no crisis, while acknowledging it would have been preferable for State funds spent on Irish Water to remain off-balance sheet.
“While the announcement is embarrassing and is going to cause more controversy around Irish Water, in terms of the budget position, it doesn’t reduce my space to give modest extra spending increases through Brendan Howlin and to give reasonable tax reductions on personal taxes,” said Mr Noonan.
Same amount
“I still have the space of €1.2 billion to €1.5 billion. Whether it’s on-balance sheet or off-balance sheet, it’s the same amount of money. All that’s in question is how the spend is accounted for.”
The Taoiseach, the Tánaiste and several Ministers have insisted for months that the utility would pass the Eurostat test, despite the low numbers of people paying their charges.
But in a stark assessment of Irish Water, the EU statistics agency yesterday confirmed the utility had failed its market corporation test. The decision means the utility must remain on the exchequer balance sheet in the coming years.
Eurostat also has issue with the considerable Government control over Irish Water, in particular regarding board appointments and operations.
In a statement on the ruling, the Government insisted nothing would change in relation to Irish Water.
“It is important to note that this adjudication has no implications for the upcoming budget for 2016, nor indeed on the Government’s budgetary projections out to 2020,” the statement said.
It did say the national debt and the deficit figures would be affected by the decision.
Aid boycott
Anti-water charges campaigners said the ruling would help with the boycott of the levy.
Socialist TD Joe Higgins said the development was another fine mess by the Coalition. "It exposes the sleight of hand they were trying to get away with. This will only further emphasise the need to abolish water charges."
Sinn Féin TD Pearse Doherty said the Government had egg on its face and needed to move to scrap the levy.
"The whole argument against Sinn Féin's call to abolish Irish Water is now gone," he said. "Enda Kenny should now accept defeat; he should scrap Irish Water and water charges.
“If the Government continues with its plan to charge for water and to keep Irish Water off-balance sheet, it will need to scrap the water conservation grant or increase charges. Either way, it will be the customer that pays and the public must be made aware of this,” Mr Doherty said.
Fianna Fáil leader Micheál Martin said Irish Water was a “failed political project”. He said statements that this wouldn’t affect policy were unbelievable.
