EU U-turn means McCreevy is free to borrow for budget

IRELAND was given the EU green light to borrow billions to invest in roads, schools, hospitals and other major capital projects yesterday.

In a major U-turn the EU has become less rigid in its application of the stability and growth pact limiting the power of EU governments to borrow, after the introduction of the euro.

The reforms proposed by EU commission president Romano Prodi follow a twin-track approach: making life easier for countries like Ireland with sound public finances; but cracking down harder on those with large deficits and national debts.