Dáil Éireann díospóireacht -
Wednesday, 24 Mar 1993

Vol. 428 No. 2

Written Answers. - European Economic Agreement.

Helen Keogh

Ceist:

34 Ms Keogh asked the Minister for Finance if, in view of the recent agreement at EC level to proceed with the establishment of the European Economic area without Switzerland, he will give details of the implications for the overall level of Cohesion funding due as a result of the European Economic Agreement; and the amount Ireland stands to gain.

Minister for Finance (Mr. B. Ahern)

Following the decision by Switzerland not to ratify the European Economic Area Agreement, the European Community and the other EFTA member states have recently concluded a Protocol to be annexed to the Agreement to enable its implementation without Switzerland's participation.

The Deputy will recall that the European Economic Area Agreement included a Financial Mechanism to provide a total of 500 million ECUs in grants and interest subsidies of 3 per cent per annum on foot of loans totalling 1,500 million ECUs in favour of Ireland, Greece, Portugal and Spain, the four least developed member states of the European Community. The Protocol includes a provision to adjust the Financial Mechanism to take account of the loss of the Swiss contribution. The adjustment to the Financial Mechanism involves a reduction in the level of interest subsidy, from 3 per cent to 2 per cent on the loan element of the Financial Mechanism. There is no change in the provisions for grants, or in the total amount of loans to be provided under the mechanism. The value of the adjustment is approximately 75 million ECUs over five years or just over 10 per cent of the total resources originally envisaged for the Financial Mechanism.

This adjustment represents a satisfactory compromise from Ireland's point of view, bearing in mind that Switzerland accounts for about 28 per cent of the GDP of the EFTA States concerned.

It is not possible to identify precisely the impact of the adjustment on Ireland. However, on the basis of Ireland's current share of the EC Structural Funds, Ireland could expect to receive up to 50 million pounds in grants and 150 million pounds in subsidised loans from the Financial Mechanism over the next five years.