EU Budget Contribution

Tuesday, 19 July 2016

Questions (152, 156)

Pearse Doherty

Question:

152. Deputy Pearse Doherty asked the Minister for Finance the impact of the 26.3% increase in GDP on Ireland's annual contribution to the EU budget; and if he will make a statement on the matter. [22625/16]

View answer

Jim O'Callaghan

Question:

156. Deputy Jim O'Callaghan asked the Minister for Finance if the dramatic increase in Ireland's growth levels of 26% in 2015 will have any consequential impact upon our contribution to the EU budget, which is based heavily on our gross national income and gross domestic product; and if he will make a statement on the matter. [22831/16]

View answer

Written answers

Minister for Finance

I propose to take Questions Nos. 152 and 156 together.

Member State contributions to the EU Budget are based upon a formula which includes Traditional Own Resources (customs duties), a VAT-based payment and a residual balancing component paid in accordance with each Member State's share of EU Gross National Income (GNI).

On 12 July 2016, the CSO released updated National Income and Expenditure (NIE) Accounts for 2015 which included a very significant upward revision in Ireland's GNI for 2015. As mentioned above, GNI is an important input into the calculation of Ireland's EU Budget contributions, representing c.75% of our total contributions.

We currently estimate the impact of the CSO revision on our EU Budget contribution for 2017 as c. €380m. However, other mitigating factors mean the overall increase in the EU budget contribution is now estimated to be in the order of €280m when compared to the forecast underlying the Summer Economic Statement (SES).

It must be emphasised that the final impact depends on a number of variables including the size of the overall EU budget for 2017 (which is not due to be agreed until November 2016), GNI movements in other EU Member States and other EU budget operational developments.

The estimate is also premised on the likely ratification of the Own Resources Decision (ORD) by all Member States this year (it is now ratified by 27 out of 28 Member States). The ORD is required at EU level to translate political agreement on the methods for financing the EU Budget for the current Multiannual Financial Framework (MFF) 2014-20 into legal form.