European Commission: Budget leaks 'regrettable'

The European Commission has said it regrets embarrassing leaks from the Government’s budget plans to save €3.8bn.

Proposals on a 2% VAT rise and a flat rate €100 household levy were inspected by a German parliamentary committee this week as Taoiseach Enda Kenny held talks with Chancellor Angela Merkel.

A spokesman for Olli Rehn, European Commissioner for Economic and Monetary Affairs, confirmed officials in Brussels sent the Budget 2012 document to finance ministries in all 27 EU states.

“On behalf of the Commission the leaks are regrettable,” said Amadeu Altafaj Tardio. “We insist that this is a draft and that we have a legal obligation to share the information that we receive from the authorities in Dublin with the member states. This is actually our mandate.”

Mr Tardio said budget information must be shared among EU states as part of the €85bn bailout loan deal Ireland struck with the European Central Bank (ECB), the Commission and the International Monetary Fund (IMF).

“Ireland sees the same information from the Troika about Greece, for example,” he said.

German politicians sitting on a budget committee in the lower house of parliament were also given access to the document under strict rules reinforced by the country’s Constitutional Court. The Bundestag rather than the government in Berlin decides whether the country is willing to keep funding bailout packages.

But the Commission insisted it did not forward the unsigned, draft budget document to the German parliament.

The unprecedented disclosures from overseas had nothing to do with the Taoiseach’s meeting with the Chancellor, a government spokesman added.

Amid the fallout from the embarrassing leaks, the Government was accused of a "staggering breach of faith", with Sinn Féin suggesting that Mrs Merkel was pulling the strings.

Governments in other EU states are allowed to inspect Ireland’s budget plans as they sign off on the bailout funding every three months.

The document stated that the 2% VAT rise will take the top rate to 23% and generate €670m. Much of the plans for €2.2bn in spending cuts and €1.6bn extra in tax have already been floated publicly, such as the VAT rise and €700m savings from social welfare.

The Budget is also expected to include a property levy in the form of a flat rate €100 household charge to bring in €160m and carbon tax increased by €5 per tonne, earning €108m.