The chairman of euro zone finance ministers Jean-Claude Juncker, has warned that economic growth in Ireland could be weakened next year by the credit crisis triggered by high-risk US mortgage debt.
Mr Juncker who chairs monthly meetings of euro zone finance ministers with the European Central Bank, said the impact of the credit crisis and the turmoil it stirred up last month in financial markets could vary across the bloc.
"Ireland, Spain and Luxembourg, because of the dominant position of financial services, could suffer a stronger impact, also on tax revenue, than is likely to be observed in other regions of the euro zone," he said.
Markets expect the ECB to keep interest rates on hold tomorrow to help calm financial markets, even though the bank had signalled at the start of August it was ready to raise borrowing costs in September.
Keeping rates unchanged would be welcomed by many euro zone politicians, notably in France, which has often complained that ECB policy hampers growth by boosting the euro.
In an indirect rebuke to Paris, Juncker said the independent ECB should be left alone in its policy decisions.
"It would be good for the whole of the debate if governments would not comment on the rate policy of the bank ahead of this central bank meeting - which is unfortunately not the case because common sense is not evenly distributed in Europe," he said. "The effect of this is only disruption".
The ECB, like other central banks, has been pumping funds into the money market throughout August after many banks stopped lending to each other due to doubts about who was exposed to U.S. mortgage defaults.
The ECB said today it was ready to continue to add funds and Almunia praised its response to the turmoil.
"The ECB, in carrying out its responsibilities, acted in the right way back then in August," he told parliament.
European Internal Market Commissioner Charlie McCreevy told parliament the EU would look closely at the role of credit rating agencies, which needed to be clearer, but he warned against a rush to new regulation.
"We believe that "light touch", principle-based regulation is the best approach for the financial sector. It has proven its value. But we need to remain vigilant and draw lessons. All parties need to take their responsibility and take it seriously," McCreevy said.