Engagement on EU Cohesion Policy and Ireland: European Commission

Ar son an chomhchoiste, ba mhaith liom fáilte a fhearadh roimh an Uasal Hugo Sobral. I welcome Mr. Hugo Sobral, head of cabinet of the Commissioner for Cohesion and Reforms, Ms Elisa Ferreira, to today's engagement concerning EU cohesion policy and Ireland.

Before we begin, I have a note on privilege and some housekeeping matters. All witnesses are reminded of the longstanding parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise to engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if the witnesses’ statements are potentially defamatory of an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with such direction. For witnesses attending remotely outside of the Leinster House campus, there are some limitations to parliamentary privilege and as such they may not benefit from the same level of immunity from legal proceedings as a witness physically present does. Witnesses participating in this committee session from a jurisdiction outside of the State are advised that they should also be mindful of the domestic law and how it may apply to the evidence that they give. Members are reminded of the longstanding parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside of the Houses or an official either by name or in such a way as to make him or her identifiable.

I remind members of the constitutional requirement that they must be physically present within the confines of the Leinster House complex in order to participate in public meetings. I will not permit a member to participate where he or she is not adhering to this constitutional requirement. Therefore, any member who attempts to participate from outside of the precincts will be asked to leave the meeting. In this regard, I will ask any member participating by MS Teams prior to making his or her contribution to confirm that he or she is on the grounds of the Leinster House campus.

I call Mr. Sobral to make his opening statement. He has the floor.

Mr. Hugo Sobral

I thank the Chair, honourable members and dear colleagues. First, I offer my apologies on behalf of Commissioner Ferreira. Personal health-related issues have prevented her from being here today. The Commissioner asked me to stress, however, that she recognises the importance of the committee's work, and she is keen that we contribute to these discussions. Ms Ferreira is eager to meet the members in person and to travel to Ireland as soon as the conditions allow it. I thank the members for permitting me to speak in her place.

It is always a pleasure to discuss cohesion policy with Ireland. We have a long history of working together for the common European good. Ireland is a success case of cohesion policy and has converged greatly with Europe since its accession but, as with every other country, it also addresses the challenges of internal disparities and that is why we are here to support and help. This discussion is very timely as we are at the beginning of a new chapter of our history together, one which has opened this year with a new financial period and also with historical decisions which were taken last year as a reaction to the pandemic.

As the committee will be aware the European Union has been a project of solidarity between countries and peoples and cohesion policy has been a concrete expression of that solidarity, from which we all stand to gain. Solidarity also rhymes with self interest because in a union we are all better if everyone is better.

Today I would like to address two key expressions of European solidarity with the people of Ireland which are rooted in cohesion policy. First, there is the Brexit Adjustment Reserve. This is European solidarity in action with those suffering the economic and social fallout of Brexit. As the committee is aware the European Union did not choose or ask for Brexit but we have to deal with its consequences and the Brexit Adjustment Reserve is a sign of solidarity with those most impacted by Brexit. Since Ireland was precisely the member state most impacted, Ireland will get the most support of €1.16 billion, which is a little more than 20% of the overall reserve.

A particular consideration should be given for the fishing industry in the use of this reserve, but member states have some flexibility and discretion in investing these funds in the sectors and regions that have been most affected. Ireland will also be the first member state to receive prepayments under the Brexit Adjustment Reserve. Some €361 million will be disbursed before Christmas corresponding to the 2021 tranche and these funds will be disbursed in three tranches. We and our services are here to help Ireland with any and all practicalities that may be needed to ensure these investments reach all of those who need them most.

The second expression of European solidarity with Ireland, is the new PEACE PLUS programme. This is a unique programme, unique in its goal of promoting peace and reconciliation between the communities across the Border, in its successful history and track record of making a real difference on the ground and in the broad support it commands, not just across the communities of Northern Ireland, but also across the European Union, and even with the UK authorities. It is no secret that the post-Brexit relationship with the UK has not been as smooth as we would have wished. Discussions have been intense on a proper application of the withdrawal agreement and the Northern Ireland protocol but on the PEACE PLUS we have had good co-operation and a strong commitment from everyone involved to make this programme a continued success.

This is important because the situation on the ground has deteriorated and the PEACE PLUS programme is needed now more than ever. We need a grassroots approach which draws both communities together. The programme will be promoting economic prosperity to consolidate the progress made over the past 30 years and to safeguard the Good Friday Agreement. For that, seamless co-operation between the two sides of the Border is necessary. That is what we will be basically aiming at with the PEACE PLUS programme in the next number of years. The programme is ready with €1.1 billion of investment to promote peace, economic regeneration, empowering youth and promoting the green transition, among other things. We are quite satisfied with the preparation. There was a very good public consultation with thorough involvement of both communities on both sides of the Border. Now we must finalise the last details so that the programme can start on time in the first quarter of 2022.

Let me also highlight the contribution of cohesion policy for Ireland for the next years and financial period with a total of €1.3 billion, including this new Just Transition Fund which will support the midlands in transitioning out of peat extraction and peat for electricity generation.

Our discussions on the Partnership Agreement with the overall strategic orientation are ongoing and we hope that the funds can hit the ground in mid-2022.

I would like to finish with the words of an illustrious Irishman, James Joyce, who said:

I am tomorrow, or some future day, what I establish today. I am today what I established yesterday, or some previous day.

So, let us continue building on the solid ground established since Ireland’s accession and lay the basis today with the funds and opportunities made available from PEACE PLUS, the Brexit Adjustment Reserve, the Recovery and Resilience Facility and the mainstream cohesion policy for successful and prosperous next generations of Irish citizens. I thank the committee very much.

I thank Mr. Sobral very much and I have two members indicating their wish to speak. I call Deputy Calleary followed by Deputy Howlin.

Before I let them in I do not have a question but wish to make an observation. That has been as clear and as concise a contribution I have ever heard from anybody coming from anything to do with the European Union or the Commission. It was concise and clear in language that was non-jargon-like and was very refreshing. To hear language like we can "hit the ground running" in early 2022 and to looking at the PEACE PLUS campaign with a "grassroots approach" is the language that people are used to, even in respect of the midlands programme, together with his speaking of the PEACE PLUS programme starting on time in the first quarter of 2022. I wanted to say that and I am very grateful. Whether or not Mr. Sobral wrote it himself or his team helped him to do so, I wish to congratulate them and Mr. Sobral himself and no doubt the members will follow now in a similar vein with clear and concise observations and questions. I call Deputy Calleary.

That will not be a challenge for me, Chairman. I thank Mr. Sobral for his contribution. It was clear and concise. Unfortunately, it is clear and concise coming from Brussels, but when it gets to Dublin, that is where the problems start. I come from the northern and western region of this country. We were a developed region and now have slipped to being "a region in transition". For us to get the major infrastructural projects, be they transport, industry, electricity or whatever, we find ourselves constantly having to battle an inertia among the permanent government that does not really see the potential of our region, despite having had the support of Mr. Sobral’s unit and organisation.

In the context of Mr. Sobral’s language around a grassroots approach and internal cohesion, what weapons does Mr. Sobral, his unit and the Commissioner have to push national governments to do more on internal cohesion? The notion, given all of the investment that cohesion funding has put into our region, that we would once again slip from being a developed region to being one in transition is not the fault of the EU but lies within this island. In respect of the involvement of communities, what supports are there?

Second, with regard to cohesion projects moving forward in the context of climate change, what specific role would cohesion policies have? Mr. Sobral specifically mentioned the Just Transition programme in the midlands. Given that it is rural and regional communities which are going to have the initial costs and, hopefully, many benefits of climate change, what role will the Cohesion Fund play in assisting communities and regions but allowing them also to maximise the benefits of new climate change approaches?

Mr. Hugo Sobral

I thank the Chairman for his compliments which I will certainly share with colleagues who have contributed to the speech. On the question put by Deputy Calleary, I alluded to this in my initial contribution.

Since its accession Ireland has been a successful case of cohesion policy and converging with the rest of Europe. As I have also mentioned, it still has internal challenges and internal disparities that it needs to correct. This is not exclusive to Ireland. Many other member states, in fact almost all member states, have these internal disparities. It is true that this is still the case in Ireland. Between Dublin and Cork and rural areas we see a wide difference. There are also the northern areas close to the Border. We very much encourage member states to prioritise investment in this next generation of programmes. Cohesion is about convergence between member states and about correcting internal disparities. It is important that member states commit to the levelling up of various regions. In the case of Ireland this is certainly necessary. Deputy Calleary mentioned additional layers introduced at national level. It is not exclusive to Ireland but it is true that while sometimes we in Brussels are accused of being too heavy on processes there is also the gold-plating that sometimes comes from member states. For this generation of programmes we have tried to simplify their use as much as possible. It is important this is followed at national level in how it is implemented. Additionally, it is important that regional authorities are empowered. It is important that as much as possible these funds and programmes are managed close to the people and beneficiaries. Empowering regional and managing authorities is an important component of making the programmes more efficient in Ireland in future.

When it comes to the specific questions on the contribution of the Cohesion Fund to climate, the European Regional Development Fund has an obligation to contribute to climate. A total of 30% of the fund needs to go towards climate-related expenditure. I see a lot of potential in Ireland for energy efficiency of houses, which is an issue. This area is also being tackled under the recovery and resilience plan for Ireland, where complementarity can be established with cohesion policy. I also see a lot of potential in clean mobility and helping people to develop public transport systems that help people move from cars to buses and rail. The PEACE PLUS programme will also look at the potential for green transition and geothermal and renewable energy. There is a lot of potential for contributions from cohesion to climate transition in Ireland. We are discussing with the Irish authorities the prioritisation of the climate dimension and the digital transition and innovation dimension. These are the two big priorities we want to push across the board.

I thank Mr. Sobral. I send my personal regards to Commissioner Ferreira. I hoped she would be here. She and I were members of the environment Council during the 1990s, along with Michel Barnier and Angela Merkel. I do not know where I went wrong. They seem to have got on well since. I was the Minister responsible for cohesion funding in the run-up to the previous multi-annual financial framework. I want to make a political point first. We in Ireland were hugely appreciative of cohesion funding for the years we really needed it to be transformative. It is less important now. I made a number of visits in advance of the previous round to places such as Wales that got enormous transfers of resources to their benefit but subsequently voted for Brexit. I do not know whether we need to go back to better branding of the transformative nature of cohesion funding. It seems domestic governments claim European funding as their own when it is good and blame the European Union for anything they disagree with. In terms of the cohesion of Europe as opposed to the cohesion of Europe's economies, we need to have some view towards this.

I want to ask about the Brexit adjustment fund and this will probably come as no surprise. I represent the south-east of Ireland. My county of Wexford is a poor area in a rich region, relatively speaking. One of the issues that is very important to us now is developing the potential of direct connectivity with Europe, with the impact on the land bridge being clear. This has happened. There is a 400% increase in conductivity between the port of Rosslare and a variety of continental ports bypassing the UK land bridge. Mr. Sobral has told us €360 million has been transferred, or is about to be transferred in the coming days or this week. My understanding is that a significant portion of this will be for port development to make our ports Brexit ready. I am interested to hear Mr. Sobral's specific perspective on how the money is to be spent to make sure that it is spent, as we have heard from the Court of Auditors, in a way that is entirely consistent with the legal aims and objectives of the Brexit adjustment fund. Is it a matter of spending it first and clearing it afterwards? Is there a requirement for projects to be specifically cleared with the Commission in advance of spending? It will be a tight framework to spend the bones of €1 billion over the next three years if there is a protracted project validation system.

My next question is on the PEACE PLUS process. I was involved in negotiating the last round in the previous multi-annual framework. We are in public session so I will be guarded in what I say about this. I can say there was no great enthusiasm from the Westminster Government at the time for the programme. The agreement we came to is that it would not object to it but it would not advocate for it within the Commission in the previous funding round. I am a little bit concerned about how it will be sustained. I am heartened by Mr. Sobral saying that despite tensions elsewhere there is good co-operation with the UK authorities on the PEACE PLUS process. With regard to oversight, since it was overseen by the special EU programmes body here presumably it cannot be a special EU programme body if the UK is no longer part of the EU. How does Mr. Sobral see this developing?

Mr. Hugo Sobral

I thank Deputy Howlin and I salute him. Even though I did not have a chance to work personally with him his name is still known precisely because of his previous responsibilities of being in charge of cohesion policy in Ireland. I will certainly pass on his regards to Commissioner Ferreira. She also has very fond memories of her time in the environment Council. I agree with the Deputy's initial comments on the importance of cohesion for the European project. Cohesion tends to be looked on as an old policy and a policy that needs to be replaced with other priorities but it is the vehicle through which we implement our priorities in a way that reinforces economic, social and territorial cohesion. Deputy Howlin has given the good example of Brexit.

We know that the cost of living in certain territories comes back to haunt us at the ballot box. We need, therefore, to do more to avoid internal fractures but also to communicate better, as the Deputy said, because sometimes it is not known that a certain type of support comes from the European Union. This visibility of the support is very important.

On the Deputy's specific questions on the Brexit adjustment reserve, the reserve was conceived as a special instrument precisely to cater for the impact of Brexit. A high degree of flexibility is given to member states. In contrast with other programmes, instruments and inclusion policies, there is no need to programme and plan the investments. We are not asking member states to send us a list of what they want to do. We will be giving 80% pre-financing. Of the €5 billion, 80% of it will be pre-financed and it will be given it to member states in three trenches. As the Deputy said, Ireland will receive the first one this year.

Member states then need to make their investments and implement their measures. We believe they are best placed to assess which sectors, regions and communities should be supported and which are most affected by Brexit. We give them a certain flexibility to make these decisions. It is important, however, and I will underline this, that member states will then have to report in 2024 on what they have done and how they have used these investments. It is an ex post rather than an ex ante assessment. There needs to be a clear link with Brexit. A fundamental condition for the use of the funds from the reserve is the link with the effect of Brexit. This needs to be proven in the declarations of expenditure we will receive from member states.

In the case of ports and connectivity, we know that will be an area where Ireland will be using the Brexit adjustment reserve. It is important to also make this link with the impact of Brexit and perhaps try to justify this investment. For instance, how much of the port investment is related precisely to losses provoked by Brexit? This is what we will be looking at and probably what the European Court of Auditors will be looking at afterwards. As I said, however, there is wide discretion for member states to use the funds for business support, retraining and reskilling, connectivity, reintegrating citizens who may be coming back from the UK because of Brexit or border measures. A wide range of measures can be financed. The only important requirement is to prove the link with the impact of Brexit.

On PEACE PLUS, I assure the Deputy that this is probably the only bright spot in our current co-operation with the UK on post-Brexit matters. The UK has decided to discontinue its participation in all programmes, including INTERREG programmes, with the exception of PEACE PLUS. It said it is interested in continuing with this programme and has already committed to the same level of financing as in the previous period, meaning PEACE PLUS will have approximately €1 billion. The UK will finance two thirds of the programme and the UK and Ireland will finance the remaining third. We are, therefore, seeing the same level of commitment to financing. I can also assure the Deputy on the managing authority. The special EU programmes body, SEUPB, will remain the authority running and managing this programme. We are very happy with the way it works and the way it has been preparing the future edition.

I welcome Mr. Sobral. I promise I will not be succinct but rather more circular in my commentary. I apologise in advance.

In fairness, some of what I was going to deal with has already been dealt with as regards the Brexit adjustment reserve. There will be flexibility once this money is used as a mitigation of the impact of Brexit. The fishing industry will need much more than what is in the Brexit adjustment fund. We are dealing with the outworkings of the quota arrangements post the EU-UK Trade and Cooperation Agreement and the difficulties Ireland has always had in relation to the Common Fisheries Policy, CFP. That is obviously for another day and another forum, however. I am just stating the position.

On the PEACE PLUS programme, members of the republican ex-prisoner network had difficulties in that they did not believe they were sufficiently catered for. This was brought to my attention, particularly by Mr. Kevin Mulgrew, who died recently. He will be a serious loss to the community sector, republicans and others in Dundalk and further afield. In my dealings with the SEUPB, I sometimes brought up the issue people had with governance and administrative difficulties regarding projects. They have indicated that the difficulties sometimes lie here and whether it is the local council or the State, the governance rules are not necessarily taken properly from Europe and what is actually imposed is rather more difficult for people to operate. Mr. Sobral might comment on that. It may be necessary for training or whatever to be provided to the State regarding best practice around dealing with that.

Sometimes these projects are run through local councils. In certain peace projects, there has not been flexibility and relatively daft scenarios have sometimes been imposed. We all accept the idea of peace funding. I know of a particular project, however, that required a significant number of interactions with the Protestant community in the South. It is not that I can speak on behalf of Protestants but I imagine they do not quite see themselves in the same light as the Protestant, unionist and loyalist community in the North. Sometimes people will end up putting on a paper show to make sure they tick the boxes to secure funding. What really needs to matter is the impact of the projects and that we are carrying out projects that are viable and worth doing.

I will make an apology now because I am very quickly going to go above and beyond the remit of Mr. Sobral and what he has chosen to discuss. I do so because he is appearing on behalf of the European Commission. We have seen the ongoing solidarity that is being shown around the Irish protocol. Mr. Maroš Šefčovič had a private meeting with the committee last week in which he was very straight with regard to the Irish protocol being the only show in town. He was very diplomatic in stating that there are difficulties in dealing with David Frost and the British but that he hoped to bring about a successful conclusion or what may be one of many conclusions. Following that meeting, we heard that the British Government is proposing a nationality and borders Bill, which will create great difficulties. I am from Dundalk, which is right on the Border. Louth is my constituency. This legislation would create difficulties for people living in my constituency. These could be non-Irish EU citizens who may need to use some sort of online notification before travelling to the North. It is obviously unworkable and something on which we require the Commission to be very strong. The committee has already committed to do some work on the issue.

Will Mr. Sobral comment briefly on the EU's position as regards vaccines and the Trade-Related Aspects of Intellectual Property Rights, TRIPS, waiver. There are serious worries that we are doing an insufficient amount on this. We all accept the solidarity that has being shown across Europe with regard to the vaccine roll-out but none of us is safe until all of us are safe.

I would not be overly concerned if someone said it is an alternative to the TRIPS waiver. However, they need to put in a solution that will deliver vaccinations across the developing world, particularly in the context of what we are now dealing with in the Omicron variant.

I would also like to know what the conversations are at European Commission-level about the energy crisis. What particular role can Europe take? I accept that some things are beyond national governments, but the European Commission is a major player. It can obviously have more of an impact.

On the cohesion funding, I agree with much of what Deputy Calleary in particular has said. We may need this sort of funding into the future, because the fact is that the conversation on Irish unity has started. While the Commission and the EU will not necessarily have to advocate for it, but they will have to have plan for that eventuality. When we eventually deal with that, post the referendum, that the European Commission and EU will have to play its part in delivering a smooth transition. I have no doubt that they will.

I thank the Chair and I apologise for going slightly tangential to Mr. Sobral’s opening statement

It is up to Mr. Sobral on what he wants to answer. He is here to speak about the specifics of his own role and competencies. I know that the issue of the visas is not within his remit. I will leave it up to him as to whether or not he would like to respond to that.

Mr. Hugo Sobral

I thank the Deputy, who touched on many issues. Briefly, on the Brexit Adjustment Reserve, we know that it will not compensate the entirety of the losses. It is basically a sign of solidarity. However, much more needs to be done. We are currently in discussions with the UK about the total number of catches, since they are now no longer in the Common Fisheries Policy. This is indeed a separate discussion. It is not necessarily easier.

On the PEACE PLUS programme, I can confirm that the programming of this next period has been done following the right consultation across the communities. As far as we know, there is satisfaction across the Border on the content of the programme, which follows largely some of the priorities that were there before, such as economic regeneration, supports for victims and youth. It also introduces some new elements such as the green transition and the community and grassroots approach. These are widely shared priorities.

As for the governance rules, we are taking it up with all governments, and certainly with Ireland, to make sure that these are as flexible and as simple as possible. I would also like to point out the possibility of technical assistance. The programmes of technical assistance can be used to capacitate both the beneficiaries and the regional administrations in making use of funds. We will take this up with the Irish authorities in preparing the next programmes.

The Deputy’s three specific points are out my of remit, so I should be relatively cautious in replying. However, I can say that we are working to have the Northern Ireland protocol respected and implemented. We have already proved that the EU is looking at the real problems with implementation and trying to address them. For instance, we will move ahead with the proposal on medicines to make easier the selling and export of medicines into Northern Ireland. We have also tabled a series of proposals to make the customs processes much easier. I will certainly report what the Deputy has just mentioned, as well as his concerns, to Vice-President Šefčovič, so that both he and our UK service is aware of this cross-Border movement that needs to remain unhampered into the future.

The vaccines is probably one of those areas where we are doing a lot but it is not sufficiently recognised. The EU is already the greatest donor of vaccines. We are the largest exporter. We have exported more vaccines than were administered in the EU territory. The issue of the TRIPS waiver is being discussed in the World Trade Organization. There is a discussion to be had on that, but I would also say that the waiver is not a silver bullet to address the problem of lack of vaccines in developing countries. There are the issues of protection, distribution capacity, the cold chains needed for certain vaccines, health systems and national programmes of vaccination that are needed. We also need to look at those other aspects. We are trying also to support developing countries in looking at these other dimensions, which are equally necessary for successful vaccine roll-out.

It is my guess that the energy crisis will probably be discussed soon. There is a European Council taking place presently. The Commission has proposed a toolbox of actions that member states can take to alleviate the rise in energy prices for citizens and, in particular, for vulnerable consumers. These include social tariffs and reducing VAT for electricity, for instance. All of this is within the remit of the member states. However, we ourselves will work on increased energy storage capacity, precisely to avoid being faced with situations where we run out of gas. We will also work on joint procurement, which will facilitate our dealings with third countries that are exporters of energy. We are therefore taking some measures at European level. There are other measures that could be taken at national level. There needs to be a combination of both. We are also looking at the ways in which the markets are functioning to see if the price-setting system is the most efficient one. We are also looking at the demand transmission service and how it is working to make sure that there is no malfunctioning in the system. As the Deputy knows, the current rise in energy prices is a result of different factors, such as the recovery, the gas-led rise of consumption in Asia. There are therefore things that are beyond what we can do. However, we can certainly do more to try to address this. A number of measures are being taken. While they will probably not produce immediate results, they will make us more resilient in the medium term.

I now call Deputy Haughey.

I thank the Chair and Mr. Sobral for his presentation. I represent a Dublin constituency. While it would be considered affluent in EU terms, it has significant areas of disadvantage as well. The Structural and Cohesion Funds have traditionally been important for Ireland. I am thinking about the 1990s and noughties. This has resulted us now being a net contributor to the EU budget.

I make reference to Mr. Sobral’s remarks about how the situation on ground in Northern Ireland has deteriorated. He is right about that. Brexit and the Northern Ireland protocol have caused problems. We have seen demonstrations by loyalist groups, buses set on fire, and so forth. It is therefore important that Vice-President Šefčovič concludes negotiations with the UK on the implementation of the Northern Ireland protocol. I know that it is not through any fault of his own that these negotiations have not concluded.

The PEACE PLUS programme is very important in that context. I would also draw the Commission's attention to the initiative by the Taoiseach and the Government, known as the shared island initiative, and dialogue that is under way in the regard. The latter involves increased dialogue among civic society across all groups, with the main objective of ensuring peace. The PEACE PLUS programme very definitely feeds into that.

My main question, which has been touched on by Mr. Sobral, relates to the ongoing monitoring of expenditure, the need to avoid misappropriation, the need to avoid waste and the need to ensure efficiency. I know we are talking about a number of funds, and I do not know if Mr. Sobral wants to answer generally or in respect of all of the particular funds. With regard to oversight, what role do the Irish authorities and Departments have in monitoring expenditure, what role does the European Commission have and is the European Court of Auditors responsible for the overall monitoring of these funds?

Mr. Hugo Sobral

The Deputy is referring to Dublin, where there is the issue of the clean mobility that is necessary to ensure that pollution levels and CO2 emissions from personal transport come down. I hope the next level of cohesion policy can contribute to that.

On the initiative of the Irish Government, I certainly commend this shared island initiative and dialogue. The Irish authorities have been very constructive and very good partners in all of these discussions related to Brexit. We have a close interaction with them at different levels. I know Commissioner Šefčovič addressed the joint committee recently. We are totally on the same page regarding the challenges we face in trying to make the best of a situation that we did not choose and a model of separation that we did not choose. We are not responsible for that but we are trying to make the best of what is a difficult situation and make sure that countries stick to their commitments and respect the agreements that have been signed.

The auditing of cohesion programmes is a complex and multilayered process. It involves, first, the national level, so there is a sort of devolution of competences to the national level to properly audit the national programmes. Then, there is the Commission level and the auditors in the Commission can also basically audit the national auditors’ work. Then, there is the European Court of Auditors that audits everyone else, and the European Parliament also looks at what we are doing. There are different layers of auditing.

In Ireland, a couple of years ago, we had some issues related to the management and auditing process that we hope can be improved. We will also be looking in this next period to ensure certain shortcomings that we identified in previous periods can be addressed. This comes most notably from what I mentioned earlier, that is, the need to empower the managing authorities to have more competences in certifying expenditure and in being closer to the investments which are done on the ground. A substantial part of it could be addressed if the managing authorities could have more competences and more power to manage the programmes.

Overall, we have a constructive relationship with Ireland on this one. I am sure this is a dimension that will be addressed in our next partnership agreement.

On that point, Mr. Sobral mentioned the European Court of Auditors and I have one question. With regard to the front-loading of the disbursement of 80% of the funding prior to the application deadline of September 2023, the Court of Auditors has raised concerns that this may lead to a situation where there are ineligible projects that get 80% funding and they will have to repay it. What is Mr. Sobral's take on that? Does he share those concerns of the Court of Auditors?

Mr. Hugo Sobral

Yes, it is true that the Court of Auditors has lately expressed some concerns with the way the expenditure will be done in the coming years. That is not just specifically on the BAR; it is also on other decisions that we have taken. For instance, the committee may be aware that we adopted a programme last year, the coronavirus risk investment initiative, which has totally flexibilised Commission policy on the way funds can be spent. Basically, we have allowed member states to transfer money between funds and between regions in order to address the problems caused by the pandemic and, indeed, Ireland has made good use of this flexibility. I think 60% of ERDF funds were used to buy personal protective equipment, a situation that was not originally foreseen. The Court of Auditors has expressed some concerns on these extra flexibilities that have been given as a reaction to the crisis and the way this will be controlled and monitored in the future. I think it is a legitimate concern but I also have to say it was a legitimate political decision to act in the way we have acted in basically giving this extra flexibility and this additional margin of discretion.

It is the same with the BAR. With that, we are dealing with a problem that we have never dealt with before - one member state going out from the EU. We do not know what the consequences are and we cannot anticipate how this will unfold. It is only natural that we entrust member states with the possibility to address this and give them the flexibility to address it because they are best placed to assess this impact.

Of course, this does not mean we are neglecting the control and management dimension. We are accountable and we always want EU taxpayers' money to be properly used. We will just have to combine both. It requires an extra effort from member states and from us, but I think the political decisions that underpin this flexibility were totally justified. It is also justified that the Court of Auditors is concerned with a new method and a new way. We need to be rigorous and member states need to understand that with this flexibility comes additional responsibility in making sure the funds are used for what they are supposed to be used for. I hope that, together, we will be able to address that.

If there are no more questions, I take this opportunity to thank Mr. Sobral for his time and for his contribution, and also for his openness in regard to the questions raised by the members. I see that Deputy Ó Murchú has a further question.

Yes, and I appreciate the latitude that Mr. Sobral gave me in the first place. I want to go back to the point he made on the technical assistance relating to the PEACE PLUS project and those difficulties that sometimes arise in the context of governance. It is possible to get a synopsis or brief from Mr. Sobral in that regard? That would be useful. I met with a number of groups that met with a facilitator the other night in regard to PEACE PLUS. Mr. Sobral has the themes and the pillars, but there is the question of flexibility beyond that.

It ensures that best practice is being implemented by the councils, and whoever else, and that we are not overly impacting people in operating the governance rules too rigidly. If we could get that from the witness, I would really appreciate it.

Mr. Hugo Sobral

We will send to the committee a short paper on this, detailing the provisions and possibilities that exist. That is no problem.

I have a brief technical question, if I may?

Just to clarify, we were informed that the total Brexit adjustment reserve allocation to Ireland is €920.4 million. I believe Mr. Sobral referred to a figure in excess of €1 billion. I just want to be clear on the figure.

Mr. Hugo Sobral

The €900 million figure was in 2018 prices. The €1.16 billion figure is in the context of current prices. That is the difference. With the euro today, it is €1.16 billion.

I thank Mr. Sobral for his engagement with the committee and ask him to pass on our best wishes to Commissioner Ferreira. We look forward to receiving the information requested by Deputy Ó Murchú. Tá an cruinniú críochnaithe anois agus beidh an chéad chruinniú eile Dé Céadaoin, an 19 Eanáir ar 9.30 a.m. agus chífidh mé na comhaltaí ansin.

I thank Mr. Sobral once again and wish him a nice Christmas and a happy new year.

Mr. Hugo Sobral

I thank the Chairman and the committee for having me.

The joint committee adjourned at 10.51 a.m. until 9.30 a.m. on Wednesday, 19 January 2022.