November 18, 2011 / 2:09 PM / 8 years ago

Ireland cries foul after German budget leak

DUBLIN (Reuters) - The Irish government has complained to European partners after confidential budget information shared with its EU-IMF lenders was leaked by German lawmakers, sparking a political storm at home.

Ireland's Finance Minister Michael Noonan arrives to attend an European Union finance ministers meeting in Luxembourg October 4, 2011. REUTERS/Francois Lenoir

The media and opposition reacted furiously at the fact that the details of the December budget were presented to German lawmakers before their Irish counterparts, heightening fears that its EU-IMF bailout has undermined Irish sovereignty.

“Germany is our new master,” ran a banner front-page headline in the Irish Daily Mirror. Opposition leaders in parliament described the leaks as “incredible” and “unprecedented” and demanded the government explain.

New German laws give its parliament the right to be fully informed about bailout countries’ progress before new trenches of funds are paid out and Ireland’s main opposition party led cries Germany was now calling the shots in Europe.

Germany is pushing aggressively for EU treaty change to create tighter fiscal discipline across the bloc and a spokesman for its finance ministry said there was a clear procedure allowing parliament to see confidential documents belonging to countries in EU/IMF programmes.

Irish Finance Minister Michael Noonan told state broadcaster RTE he had provided “indications of what we might do in the budget” to the European Union and International Monetary Fund as part of Ireland’s bailout programme.

The Commission passed the document to Germany, which in turn gave the document to its budget committee, which is entitled to a quarterly update on the progress of countries bailed out by the European Financial Stability Facility bailout fund.

“We understand that the Irish authorities are upset, any leak of confidential information is regrettable,” European Commission spokesman Amadeu Altafaj said in Brussels.

The commission added in a statement that it had a mandate to share all relevant information with other member states before the disbursement of fresh funds is agreed to.

The documents, first obtained by Reuters on Thursday, show Ireland will increase its top rate of sales tax by 2 percentage points in next month’s budget and make up the rest of the 1 billion euros (856.7 million pounds) it is targeting in new revenue measures through indirect taxes.

Noonan confirmed he would proposed a 2 percent VAT hike to government, but denied that a final decision had been made.

The government has “raised this as an issue of concern at EU level,” a spokesman for Noonan said.

The leader of Ireland’s largest opposition party said voters were entitled to an explanation of why the information was given to European partners before Irish lawmakers.

“I think it will be damaging in the sense that it plays to a narrative that Germany is calling shots all over Europe,” Fianna Fail leader Michael Martin told Reuters.

“It will damage sentient towards Europe and that is a problem.”

Additional reporting by Noah Barkin and Jan Strupczewski; Editing by Ruth Pitchford, Ron Askew

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