The EU's Stability and Growth Pact has been seriously undermined following today's suspension of disciplinary action against Germany and France for being in breach of EU budgetary rules, according to the Labour Party's spokesperson on Finance, Ms Joan Burton.
She accused the Minister for Finance, Mr McCreevy of having a contradictory attitude to the European Union's budgetary rules and called on him to use his presidency of ECOFIN from January to June to establish a renewed pact within the community.
"On the one hand he has refused to countenance borrowing funds up to the level permitted by the existing pact to keep the national Capital Investment Programme at the level he himself announced two years ago," Ms Burton said.
"On the other hand he exercised Ireland's vote during the night in Brussels to allow France and Germany shred the credibility of the pact by giving these large countries a very lengthy breathing space to get their public borrowing requirements into line with the demands of the pact.
She said that the political manoeuvring had left Mr McCreevy with an unwanted issue "that will overhang Ireland's EU presidency".
The current pact, she said, was one of the legacies of Ireland's last period at the leadership of the Union in 1996 and said it had been negotiated to ensure the euro would operate in a stable environment.
"Now the present uncertainty has the potential to derail this and if it is not resolved soon will bring the threat of interest rate increases down the line."
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