The Minister for Finance, Mr McCreevy, has called on the European Commission and EU finance ministers to consider the impact on the euro when deciding whether to reprimand Germany over its high budget deficit.
The Commission will decide next week whether to recommend an "early warning" to Germany over its deficit, which is running at 2.6 per cent of GDP.
"I think what will have to be considered is what member-states consider to be in the best interest of Europe. What is the best thing for the euro?" he said.
Under the terms of the Stability and Growth Pact governing the euro zone, budget deficits must remain below 3 per cent. Governments with deficits considerably higher than the euro zone can be given an official warning from Brussels.
Speaking in Brussels, where he was attending a meeting of EU finance ministers, Mr McCreevy drew back from calling for a warning to be issued against Berlin. But he said that the German budget deficit was "more serious" than the breach of Broad Economic Policy Guidelines that led to a reprimand against Ireland last year.
And he called on the Commission to show even-handedness in dealing with member-states, regardless of their size.
"You will recall I said on many occasions last year during the Irish debate that I thought what the Commission did regarding Ireland was disproportionate and I looked for even-handedness towards all member-states," he said.
The Economic Affairs Commissioner, Mr Pedro Solbes, has made clear that he supports Germany's economic policies and Mr McCreevy declined to criticise Mr Gerhard Schröder's government.
"Budgetary policies are matters for member-states. So the budgetary policy of Germany is a matter for the German government. What the Commission does is to comment on various policies," he said.
But he said that the Commission should not be influenced by the fact that Mr Schröder faces an election in September.
"The terms of the Stability and Growth Pact do not include anything about election years," he said.
Mr Solbes said that Germany's budget deficit was unlikely to reach 3 per cent in 2002 but he suggested that failure to issue an early warning now could compromise the Stability and Growth Pact in future.
