The European Commission is relaxed about the defiant public stance by the Minister for Finance and is seeking to play down the dispute.
Few in Brussels expect Mr McCreevy to take any immediate action, but the Commission is satisfied that it has fulfilled its primary aim in having the recommendation against Ireland endorsed by all EU partners.
The Commission is also playing down British reaction to Monday's much milder criticism of Mr Gordon Brown's plan to double spending on some public services over the next four years. Like Mr McCreevy, Mr Brown has indicated that he will ignore the Commission's advice.
The European Parliament will debate the reprimand against Ireland in Strasbourg tomorrow evening. The Labour MEP, Mr Proinsias De Rossa, yesterday accused the Government of showing a lack of candour about the true nature of the dispute with Brussels.
"If, as I believe, that the real basis of this conflict is a shift in the Irish Government's position on European economic co-ordination, then the Irish public should be informed of this fact.
"A judgment can then be made on the pros and cons of the Government position and its effect on the long-term relationship between Ireland and the EU, and also how it might fit in with the emerging debate on the future of Europe." Mr McCreevy defended his handling of the matter in the Dail yesterday. He said he regarded the Commission view as "a misreading of the Irish economy" and he was "supported in that fact by a number of commentators at home and abroad, of the highest eminence in the economic field.
"The Government remains fully committed to implementing its Budget as set out in December for the very reason that our policies are the ones which will enable Ireland continue on its successful growth path well into the new millennium." Most inflation here over the past 25 years was caused by external factors, he said. Even the ESRI had calculated last December that the £500 million in tax cuts would have an impact on inflation of 0.13 per cent over the next three years.
"There is no commentator in this country I know of who would say that a tightening of Irish fiscal policy would do anything for inflation, bar if one was to take out a couple of billion pounds out of the Irish economy."
The latest figures showed that, as measured on the harmonised European basis, inflation had fallen from 6 per cent in November to 4.6 per cent in December, to 3.9 per cent now.
"The rate is lower than several other larger member-states on the basis of the latest available data. While month-by-month changes are difficult to predict, I expect the inflation rate to decline further during the course of the year."
The EU Council had not taken a vote, so it was wrong to say that other member-states had voted against Ireland, Mr McCreevy added.