Irish irate as Bundestag sees budget first

The Irish and German governments became entangled in a spat on Thursday after details of the Irish budget were given to the German Bundestag, before being presented to the Irish parliament, the Dáil.

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The sensitive plans, including a two-percent increase in the top value added tax (VAT) and a €100 house-hold tax, were sent by the German finance ministry – along with a letter of intent from the Irish Finance Minister – to the Bundestag budgetary committee.

This provoked outrage in Ireland, and denials from Irish Prime Minister Enda Kenny that he had given the information to the Germans.

Irish opposition parties said if reports were true that the document was seen in the German parliament, it would represent a "staggering breach of faith" which suggested Germany was "now pulling the strings," the Irish Times daily newspaper reported.

"Let me confirm something to you, the cabinet have made no decision in regard to the budget. It is on December 6," Kenny said.

"I'm not going to comment on speculative (reports) or comment about decisions that have not been taken by the government at all."

Kenny, who met with German Chancellor Angela Merkel on Wednesday, added he had "no idea" how the document ended up in the Bundestag.

But the Irish Times, which has seen the document, said giving the information to the Bundestag was in line with German guidelines for participation in the European Financial Stability Facility (EFSF) – the German budgetary committee has to approve proposals to increase income and reduce spending before each bailout tranche can be released.

“What’s happened is the federal government meeting its legal information to inform the Bundestag about the EFSF,” one committee member told the Irish Times.

“This is widely known and seems unproblematic from our perspective. This is the day-to-day reality of a programme country.”

In November 2010, Ireland was forced to seek an €85 billion rescue package from the EU and the International Monetary Fund to deal with massive debt and deficit problems.

"We need to know whether the Irish government has revealed the detail of its budget plans to the German budget committee," he added, according to the Irish Times.

Ireland's 2012 budget next month will involve €3.8 billion in spending cuts and tax hikes aimed at cutting the public deficit to 8.6 percent of Gross Domestic Product.

AFP/The Local/hc