Updated, 14:21

THE EUROPEAN COMMISSION has said it “regrets” the fact that a draft edition of its next report on Ireland’s bailout progress – which reportedly calls for a clampdown on the issue of medical cards, and on dole payments for the long-term unemployed – has been leaked.

A draft version of the Commission’s seventh formal quarterly update on Ireland’s progress under its EU-IMF bailout was circulated to TDs yesterday, with details appearing in many of today’s newspapers.

A final version of the report was not likely to be officially published for about two weeks.

The document – which has now been published by TheStory.ie – references the fact that social welfare payments for the unemployed do not reflect the length of time for which that person has been out of work.

More needs to be done to alleviate or eliminate work disincentives andunemployment traps caused by some features of Ireland’s benefits system (e.g., the broadly flatand open-ended unemployment benefits that do not diminish with the duration of theunemployment spell) and the recent move to de-couple housing support from unemployment statusshould be further advanced.

Ireland’s unemployment is a regular theme in the report, which says “more remains to be done” to lower the unemployment rate, and that the “scale of the challenge of matching existing jobseekers to employment is considerable”.

Medical card clampdown?

It also claims that Irish authorities are to consider reforming the rules around eligibility for medical cards – having noted that all unemployed people are currently entitled to one.

This may indicate that preparations are already underway for a possible Budget move to split the automatic link between unemployment and access to free GP care.

The health sector is identified as being a particularly problematic one in terms of reining in government spending – with the report noting that while Budget 2012 set a target of €543 million in spending cuts, only 22 per cent of those savings had been delivered.

The report also says the inability of banks to get back to profitability is “a source of concern” – identifying tracker mortgages, which are not very profitable to banks, as being “a major drag” on the banks’ ability to turn a profit.

Ahead of the document being published online, the European Commission said it had seen the reports – and insisted the final version of the report, which followed the latest Troika inspection in July, “has not yet been approved”.

“We will therefore make no comment on the contents as reported by the press,” a spokesman for economics commissioner Olli Rehn said. ”The Commission regrets such leaks from whatever source.”

The spokesman said, however, that the Commission had “commended the good progress” that Ireland had made in meeting its bailout targets so far, and that this had been reflected in the falling interest rates demanded by markets for Irish government borrowing.