Thursday, 18 April 2013

Questions (11)

Barry Cowen

Question:

11. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform if he has contacted the EU Commission on the latest Central Statistics Office figures revealing the current GDP per capita in the BMW region; its impact on the region's status; and if he will make a statement on the matter. [12677/13]

View answer

Written answers (Question to Public)

On 8 February 2013 the European Council reached agreement on the EU’s budget for 2014-2020. The budget has to be agreed with the European Parliament and discussions are now taking place with the Parliament under the aegis of the Irish Presidency.

In line with reductions to the overall EU budget, Cohesion funding across Europe is expected to be reduced from €347 billion to around €325 billion. Nevertheless, while the precise details remain to be worked out, Ireland’s overall Structural Funds allocation is expected to increase from the €901 million we receive under the current round to €979 million in the 2014 - 2020 round. This represents a considerable achievement, and is due to the consistent efforts of the Government to maximize support from Europe for our Structural Funds programmes and take particular account of our serious unemployment problems.

In the case of the Border, Midland and Western Region however, the allocation it receives was reduced. This is because the region no longer qualified as a transition region since its GDP per capita exceeded 90% of the EU average in 2007-2009 - the period used to determine the status of regions across the EU for the purposes of the Multi-annual Financial Framework 2014-2020 and the new cohesion spending round. This meant that the BMW Region is now considered a more developed region relative to other regions throughout the EU 27 Member States.

The Government was concerned that the EU budgetary assumptions, which use older GDP economic datasets from 2007-2009 to determine the funding categorisation of EU regions, were likely to lead to a reduction in the BMW Region’s allocation from Brussels. Indeed, the Deputy will be aware that the latest Central Statistics Office figures reveal that the Gross Value Added (GVA) per capita - a similar measure to GDP per capita - in the BMW Region in 2010 was 84.1% of the EU average, less than the 90% threshold used to categorise regions as more developed.

However, in recognition of the new position of the BMW Region since the 2007-2009 period was used to categorise the Region as more developed, the Government, in the recent MFF negotiations in February, was successful in securing a special allocation of €100 million for the BMW Region to mitigate the effects of its change in status and in recognition of the significant economic downturn that the region has experienced.

The Government also negotiated a special allocation of up to €150 million for a PEACE IV Programme from which the BMW Region is expected to benefit. The European Council also agreed a special Youth Employment Initiative using €6 billion of Structural Funds for regions with levels of youth unemployment above 25%, from which it is expected the BMW Region will also benefit. The focus on youth unemployment is something the Irish Government had been pressing for.

In the light of this, it is my opinion that an intervention direct to the EU Commission is not appropriate at this stage.

Work in my Department, in conjunction with the Regional Assemblies, has already commenced on the preparation of a new Operational Programme 2014-2020 for the BMW region, which will be submitted to the European Commission for approval later this year.