The Government was aware since the beginning of the year that Brussels would not let it use windfalls from the Central Bank to flatter its fiscal position. But the information was kept under wraps until after the recent election campaign when the Government's handling of the economy was the central issue.
Both windfalls - €610 million in total - were included by the Minister for Finance, Mr McCreevy, in his Budget day arithmetic and in party election material.
Yesterday it emerged that Eurostat will not let the Government include the once-off profits when calculating its overall position - the General Government Balance or GGB - used by Brussels. The GGB must be kept at or close to surplus or Ireland faces both censure and fines.
Yesterday's ruling from Eurostat - the European Commission's statistical office - only related to part of the windfall; the €240 million profit made by the Central Bank on the issue of euro notes. It also emerged that the Department of Finance has known since the start of the year that the remainder of the windfall - €370 million profit related to the issue of coins - could not be used either.
The Eurostat ruling, combined with the other pressures on the Government finances, have shortened the odds on the Government avoiding a GGB deficit next year. The Government admitted for the first time yesterday that public spending had been "out of control" in the first few months of the year.
The admission, from the Tánaiste, Ms Harney, came as Ministers battle to find spending cuts of up to €100 million to prevent a Budget deficit.
Mr McCreevy has ordered Ministers to come up with savings before Friday's Cabinet meeting or else he will impose cuts himself.
Opposition parties seized on the Eurostat ruling, with Fine Gael accusing Mr McCreevy of "hoodwinking the public".
Labour claimed the Government's election campaign was now "being revealed as a tangled web of dishonesty and deceit".
Last night a spokesman for Mr McCreevy rejected the allegations that the public had been deceived. He said the Department had excluded the coin-related income from its GGB calculation since March. He added that the Government was allowed to include the €610 million figure in its domestic calculations. "There can be no question of any information in relation to the national budget arithmetic being withheld or concealed, either deliberately or otherwise," he said.
