The cost to Ireland has been estimated at €1bn and Mr Cowen said the potential impact of these measures had to be borne in mind.

The finance ministers watered down a draft statement which would have made the EU's Emissions Trading Scheme (ETS) the undisputed vehicle for cutting pollution. Instead, they agreed only the ETS was the most efficient allocation method "in principle".

Slovenian Finance Minister Andrej Bajuk, whose country is running its first EU presidency, said ministers support the leading role of the EU in tackling energy and climate change.

"However, we have to make sure this transfer to a low-carbon economy will be carried out in a sustainable manner so economic growth is sustainable and public finances do not suffer too much," he said.

"We need to take into account all costs incumbent from the climate energy package proposals. We are talking of very expensive programmes which should be kept within the framework of market forces and efficiency," Mr Bajuk said.

Ministers also stressed the need for budget discipline, despite the global slowdown, and showed no enthusiasm for the kind of fiscal stimulus being introduced in the US.

Instead, they urged France to stick to budget rules and balance its budget by 2010. Paris regards this as unwise in the current economic climate and won the concession "if cyclical developments permit".

"No matter how serious the downturn may be, we need to be reminded of the experience of past episodes of a slowdown and not to breach again the limits of our deficits," Mr Almunia said. Unlike past meetings, there were no calls for a cut in ECB interest rates.

Paradoxically, the US stimulus package helped investor confidence in Germany rise unexpectedly in February.

"The German economy is very robust," German Finance Minister Peer Steinbrueck said. "We are not facing a recession. We are facing a slowdown of economic development."  Source

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