Vol. 448 No. 1
28 Mr. Cullen asked the Minister for Finance if he will request the European Commission to express Irish relative standards in terms of GNP per capita rather than GDP per capita; and if he will make a statement on the matter. [1583/95]
In the case of Ireland GNP is a better measure of the income actually available in this country. The gap between GDP and GNP is higher in Ireland than in other member states of the EU. In particular, GDP measures output, not incomes. Ireland has a sizeable net out-flow of factor payments, the GDP measure therefore overstates the country's relative income. GNP allows for profit repatriation and also for external debt interest payments. It is accordingly a better measure of the income which is available within the country.
EU economic statistics are expressed in both national and regional terms. In the case of regional economic statistics, GDP is the basis used by the Commission, because not all the components of GNP can be disaggregated on a regional basis. Ireland qualified 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, 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.
Despite the limitations I have referred to in applying GNP on a regional basis, a case can be made for greater weight to be given to GNP in determining Ireland's relative position within the EU. This issue has been raised at the EU Economic Policy Committee, and we will continue to draw attention to it. It should be noted that in its 1994 annual economic report the EU Commission acknowledged that "... GDP figures may over/under-estimate a country's command over its income".
