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EU Funding.

Dáil Éireann Debate, Thursday - 6 May 2004

Thursday, 6 May 2004

Questions (56, 57)

Jan O'Sullivan

Question:

43 Ms O’Sullivan asked the Minister for Finance the position regarding the consideration of proposals from the EU Commission for financing of the EU in the post 2006 period; and if he will make a statement on the matter. [12988/04]

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Damien English

Question:

49 Mr. English asked the Minister for Finance the impact on the net flow of funds between Ireland and the EU if the proposals of the Commission for a multi-annual framework for the EU budget were adopted; and Ireland’s key objective in negotiations surrounding this framework. [12877/04]

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Written answers

I propose to take Questions Nos. 43 and 49 together.

The Commission communication on the post-2006 financing of the European Union was published in February this year. Since then there have been preliminary discussions of the proposals set out by the Commission. The Irish Presidency has set in motion a detailed examination of the Commission's proposals with a view to preparing an analytical report in advance of the European Council next month.

In the past, Ireland has received large transfers from the Structural and Cohesion Funds. This generous support reflected Ireland's relatively low levels of prosperity compared to other member states. Ireland's economic progress in recent years has been spectacular. This enhanced prosperity will in time axiomatically lead to Ireland's moving from being a net beneficiary of the EU budget to being a net contributor. The great improvement in Ireland's prosperity means that we can expect less structural assistance from the EU. Indeed, this move has already commenced with the current Agenda 2000 agreement, covering the period 2000 to 2006, under which Ireland's southern and eastern region is in transition from full Objective One status.

Ireland has also exceeded the eligibility threshold for support from the Cohesion Fund and commitments from the Cohesion Fund ceased at the end of 2003. Ireland's increased prosperity also results in Ireland's bearing an increased role in the financing of the EU. It is important to emphasise that this evolution of Ireland's position would happen even without the recent enlargement of the European Union.

The relatively significant part of our economy engaged in agriculture means that large transfers from the Common Agricultural Policy, as renewed under the mid-term review last year, will support Irish agriculture for the foreseeable future.

The Commission's proposals, if agreed, would not change the fundamental direction in which Ireland's budgetary relationship with the EU is going. However, the extent and timing of Ireland's move to being a net contributor will be influenced by the outcome of the negotiations. Like all member states, Ireland will pursue the best possible outcome for itself in the context of what is the best outcome for the EU as a whole. Of particular interest to us will be to protect our substantial interests under the Common Agricultural Policy. We will also seek an acceptable and equitable outcome for Ireland with regard to future cohesion policy, particularly in respect of the BMW region. Ireland's approach will also be influenced by its prospective net contributor status and the need to keep our contributions at the level appropriate for the financing of agreed EU policies.

While we will pursue our own best interests, we also strongly support the need for convergence of the new member states in the interests of a strong and dynamic Europe. We appreciate therefore that the development needs of the new member states must be reflected in the new financial framework, which will underpin the success of the enlarged Union over the coming years.

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