Eurostat to defend decision after criticisms by ministers

Accusations by ministers that the EU’s statistics body was wrong in its assessment that Irish Water was not sufficiently independent of the Government will be answered by Eurostat today.

An analysis of the decision will set out the arguments in detail and the Irish Central Statistics Office is expected to confirm the Luxembourg-based body’s decision.

The Government hoped Irish Water would be classified as a commercial entity, which would mean the State’s investment, amounting to 0.2% of GDP, would not have to be included in the country’s deficit which it is striving to bring below 3%.

The troika, in its latest assessment of the country’s economy, said Irish Water can continue to be a state body without breaking EU budget rules — but it is up to the Government to convince the public of its merits.

It paints a bleak picture of the state of the nation’s water with a lack of essential investment for decades and says Ireland is the only one of the OECD’s 34 countries where householders do not pay for water.

It blames “austerity fatigue” for the massive objections to paying for water and says it, the troika, could have been “firmer in implementing meaningful reforms”.

When the troika left the country the model and level of water charging was still under discussion as “water charging became a focus for public discontent and austerity fatigue in general”.

However getting householders to pay water bills will be essential if Irish Water is to raise revenue and deliver its investment programme.

“The ability of the Government and Irish Water to explain further the rationale for the reform and demonstrate that the public utility model is best to deliver needed high-quality infrastructure in the most cost-effective manner will therefore be critical,” it says, emphasising the economic importance of a properly functioning water infrastructure.

The review of the economy says that Eurostat’s placing of Irish Water on the State’s accounts does not compromise the country’s compliance with the euro’s fiscal rules.