Europe’s economics commissioner has distanced himself from criticism of the Government’s new water scheme by commission officials.

Pierre Moscovici, who assumed the post previously held by Olli Rehn in November, blamed journalists for antagonising the Government after The Irish Times and other media reported that a source close to the commission had expressed concern about the revised water plan.

Such concerns were raised last November as troika officials visited Dublin for a week-long post-bailout inspection mission, the second of two annual visits which are to continue until 2031 under the current repayment plan.

Flat charge

The reports cited the source questioning the efficiency of the flat charge and saying the suspension of metered charges in favour of a flat rate had come as a surprise. “A flat charge, not linked to consumption, on the face of it seems to be something that could be improved upon,” said the source.

Although the Government believed Irish Water’s debt would continue to remain off the State’s balance sheet, the source also said Europe’s statistical agency would never provide provisional guidance on its likely treatment of any initiative. Any direction to carry Irish Water’s liabilities on the State’s balance sheet would increase both the national debt and the annual deficit, thereby jeopardising the Government’s fiscal plan.

The accuracy of reports about the concerns raised by the source close to the commission was never challenged and there was never any suggestion that protocols agreed with reporters were breached.

Neither were the actual quotations attributed to the source questioned. Reports about the commission’s concern about the water scheme, which first appeared the night after the revised plan was unveiled, prompted Irish officials to deliver a severe rebuke to visiting troika inspectors the next morning. In a letter afterwards to Mr Moscovici, Minister for Finance Michael Noonan said the “intervention was extremely unhelpful and served not only to undermine the credibility of the Irish budget and the Government’s decision on water charges but also undermines the credibility of the post-programme review missions”.

However, Mr Moscovici said in response that “media reports in relation to the latest developments concerning the water sector reform and the fiscal outlook do not reflect the commission’s position”.

The exchange of correspondence was released by the Department of Finance under the Freedom of Information Act.

Tense exchanges

The Irish Times

sought the records after reporting tense exchanges between Irish and troika officials over the concerns cited in media stories.

The exchanges occurred in the Department of Finance on the morning of Friday, November 21st, after troika officials were summoned at short notice to a meeting.

In his letter, dated December 5th, Mr Moscovici said visiting mission teams sometimes agreed to meet local media representatives strictly on a background basis, in which quotes are not permitted and information conveyed is not to be attributed to any source.

“My understanding is that, very regretfully, the agreed terms of engagement were not respected by certain media.”