Vol. 443 No. 6
4 Mr. Rabbitte asked the Minister for Finance if it is the Government's policy that Ireland should continue to be treated as one region for purposes of EU Structural Funding; if his attention has been drawn to reports from Brussels that Dublin may be ringfenced from the rest of the country for the purposes of such funding; and if he will make a statement on the matter.
Ireland qualifies for Objective 1 status under the Structural Fund Regulations 1994-1999 by virtue of the fact that per capita GDP for the three years 1988, 1989 and 1990 was less than 75 per cent of the average in the European Union. The list of regions covered by Objective 1 is contained in Annex 1 to the Framework Regulation. The list includes: “Ireland, the entire country”. Article 8 of the regulation states that this list will be applicable for six years from 1 January 1994. It further states that before the end of this period the list will be reviewed and a new list may be established to apply for the following period. Therefore, there will be no change in Ireland's Objective 1 status in the period up to 1999.
The Government is monitoring, and will continue to monitor, all aspects of Ireland's position in relation to eligibility for Structural Funds especially as a consequence of an increase in Ireland's GDP per capita as a percentage of the European Union average. The improvement in Ireland's position is welcome and is a tribute to the successful implementation of our stabilisation policies and to the productive use which has been made of the EU Structural Funds which have enabled our economy to grow. As I have said, Objective 1 status for the period 1994-99 is based on GDP per capita. In the case of Ireland, GNP would be a more accurate measure of prosperity than GDP. The use of per capita GDP as a criterion for comparison of countries' income has defects. In particular, GDP measures output, not incomes. In the case of a country such as Ireland which has a sizeable net outflow of factor payments, the GDP based measure considerably overstates the country's relative income. GNP allows for profit repatriation and payments of debt interest to foreigners. It is, therefore, a better measure of the income which is available within the country. Per capita GNP has risen from about 58 per cent of the EU average in 1985 to about 69 per cent in 1993. This figure is predicted to rise to about 70 per cent in 1994. The gap between GDP and GNP is generally much smaller in the other member states.
My question relates to post-1999. Does the Minister repudiate the article attributed to Irish officials, in a leading Irish newspaper to the effect that the Government is contemplating the exclusion of Dublin, post-1999, in terms of eligibility for Structural Funds? Is the Minister saying that he repudiates what those officials said or were they acting without the authority of the Government when they suggested that Dublin would be ringfenced? Does he accept that Dublin would be adversely affected if it were excluded for eligibility from Structural Funds in the future?
I do not know of any such officials but if officials anywhere made statements of that nature they were not acting for the Government and clearly had not checked it with me. The Deputy is correct in saying that Dublin would be adversely affected if excluded from Objective 1 status or any of the other elements with which he is familiar. Dublin is at present covered under Objectives 1, 2, 3, 4, 5a and 5b in a complicated mechanism. I would not accept that we cannot negotiate for the country as a region, post-1999, towards the end of 1998. We will argue that GNP would be a more accurate measure than GDP. Any region excluded from the Structural and Cohesion Funds net would be at a loss. As the Deputy is aware, if we continue the progress we have made the concept of Ireland being an Objective 1 region, for the post-1999 period, will be a matter for more debate than for the present round. The concept of ruling areas in and out is dangerous at this stage.
The Minister has referred to the difference between GNP and GDP. Has consideration been given to the criteria of eligibility? Does he accept that the business of seeking Cohesion Funds, as between regions, omits entirely the fact that in relatively well off regions there are very poor people and poverty black spots? Does he acknowledge that Dublin has been treated badly and, on average, has received 40 per cent less per capita than the rest of the country in the most recent round of Structural Funds? Does he accept that Dublin has the highest unemployment rate and the most serious poverty black spots? For Irish Eurocrats to talk about excluding Dublin is an appalling prospect for the large unemployment black spots in this city. Can I take it that the Minister repudiates any such intention because the article as reported in The Irish Times was attributed to what were described alternatively as Irish Eurocrats and Irish officials?
I do not know of any such officials; it would be unwise for officials or Governments to negotiate on that basis, there is no need to do so. I do not accept that Dublin has not done extremely well in recent years. The Structural and Cohesion Funds have to be spread throughout the country. While a large proportion of the funds for structural development has been allocated for the road system it is not all spent in the Dublin region. A large proportion is however spent on improving the network to that region. While Dublin is allocated a substantial proportion of European Social Funds it receives only a small proportion of FEOGA guidance funds as it is not an agricultural region. It does therefore do reasonably well.
I have set down a marker that in the case of Ireland an argument can be made in favour of using GNP rather than GDP as a measure having regard to the outflow of factor payments and profit repatriation by the multinationals. This is not true in the case of other European Union countries. It would be legitimate to negotiate on this basis in the future, in the period after 1999. As stated in Article 8 these discussions will probably commence in 1998.
The Minister has said that Dublin has not done too badly but does he accept that during the past 20 years its population has increased by 250,000 and that industrial employment has declined by 36,000 in the same period? Does he also accept that because of this a special case can be made for Dublin and that it should not encounter any argument that it ought to be excluded and not given Objective 1 status?
Regardless of what may happen next week the Deputy will appreciate that I had to fight for a region, in this case, the entire country. I will join with him in 1998 if my home city is placed at a disadvantage but in the mean-time I should fight for the entire region.
