Fergus O'Dowd
Ceist:76 Mr. O'Dowd asked the Minister for Finance the reason for the over-estimate in 2002 of the EU contributions; and if a similar saving will apply in 2003. [25628/02]
Written Answers. - EU Budget Contributions.
The original estimate of €1,381 million for Ireland's EU budget contribution in 2002, which was included in the White Paper on Receipts and Expenditure published on 1 December 2001, was primarily based on the expected shape of the 2002 EU budget, which was adopted on 13 December 2001. Subsequently, two supplementary amending budgets adopted in the EU in 2002 resulted in substantial downwards revisions in the contributions expected of member states in 2002. These reductions in member state contributions were possible because of the carryover into the 2002 EU budget of an outturn surplus of €15billion from the 2001 EU budget. This surplus from the 2001 EU budget arose from savings in the agricultural sector, fines paid in competition cases and the under-utilisation of allocations for the Structural Funds. The overall 2002 value to Ireland arising from the supplementary amending budgets is some €281 million – involving a saving of €259 million on our estimate for the contribution itself and a direct refund to the Exchequer of €22 million. Savings on our estimated 2002 EU budget contribution were signalled in the press statement of 2 July last accompanying the end-June 2002 exchequer returns.
The rest of the saving on Ireland's EU budget contribution, some €71 million, essentially reflects the slowing rate of economic growth. GNP is the major element in determining member state contributions to the EU budget. If Ireland's GNP growth outstrips the forecasts underlying the EU budget, retrospective balancing payments must subsequently be made. In recent years, Ireland has had to make substantial retrospective payments in respect of unforeseen economic growth. In 1999 this balancing payment was as high as €181 million and in 2001 it was €135 million. The forecast for the 2002 EU budget made a prudent provision for a balancing payment but in the event our balancing payment in 2002 was only €19 million. In effect, a further saving of about €71 million is therefore available. This makes for a total saving of about €330 million on our EU budget contribution estimate for 2002. I might add that the definitive figure for 2002 is not yet available because data in respect of our last payment is not yet finalised. However, our 2002 EU budget contribution should not be above €1,051 million as indicated in the White Paper on Receipts and Expenditure published on 30 November last.
The 2003 EU budget process is nearing completion but the budget is not due to be formally adopted by the European Parliament until next week. A number of imponderables have to be taken account of in the forecast of Ireland's 2003 EU budget contribution. These include: the possibility that the European Parliament, which has the final say on more than half of the EU budget, could increase the allocations adopted by Council on its second reading; we do not yet know the budget outturn for 2002 and hence the surplus left over for carryover into 2003; the amount that will have to be repaid to the UK in 2003 under the 1984 Fontainebleau agreement is not yet finally known; we also do not know the exact amount of Ireland's balancing payment due in 2003; and the demands that might be made on the EU budget in respect of such EU facilities as the recently established EU solidarity fund and other unforeseeable contingencies.
From the above, the Deputy will see that factors impacting on the eventual outturn are only known definitively after – and in some cases some considerable time after – the original budget provision is decided upon. In some years savings arise and in some years excesses arise.
The 2003 estimate for Ireland's EU budget contribution includes prudent provision in respect of these factors. It is not possible at this stage to state if savings will arise on the provision. The key variables in this regard are the surplus carryover into 2003 and the GNP balancing provision arising from the final definitive provisions for GNP growth. The extent of the surplus should be known sometime in the first half of next year while the Commission will only send out its demand for and calculation of the GNP balancing payment in late November next year.