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EU Budget Contribution

Dáil Éireann Debate, Tuesday - 28 July 2020

Tuesday, 28 July 2020

Ceisteanna (219)

Mattie McGrath

Ceist:

219. Deputy Mattie McGrath asked the Minister for Finance the planned contribution by Ireland to the EU Budget over the next seven years; the justification for Ireland being the second highest contributor per capita to the EU Budget, second only to Luxembourg; the efforts that were made to seek a write down and reduction of the contribution in view of the write down received by Germany, Holland, Sweden and others; if efforts will be made to seek a reduction in the contribution by Ireland in view of the financial difficulties facing Ireland; and if he will make a statement on the matter. [19028/20]

Amharc ar fhreagra

Freagraí scríofa

As the Deputy will be aware, on 21st July 2020, Heads of State and Government reached agreement on the Post-2020 MFF and Next Generation EU, totalling €1.82 trillion. Difficult discussions took place over four days but the Government welcomes this agreement. It is a fair and balanced outcome and demonstrates that Europe can work collectively to deal with this once-in-a-generation crisis. Council conclusions set out the leaders’ agreement for the European Commission to borrow €750 billion, supporting Member States with €390 billion in grants and €360 billion in loans. Agreement was also reached on a new Multiannual Financial Framework from 2021 – 2027, totalling €1.074 trillion, which will support rural and regional development, and the transformation of our economies in line with the climate transition, research and development, and digital agendas.

Ireland has been a net contributor to the EU Budget since 2014, and this position is set to grow further over the course of the next MFF. Ireland’s contributions to the EU Budget are projected to increase considerably over the coming period in all scenarios as a result of economic growth in recent years.

In May 2020, the European Commission produced a needs assessment underpinning the proposed “Next Generation EU”. In this needs assessment the European Commission estimate that Ireland’s contributions to the Next Generation EU package would be in the region of approximately €18.7 billion over the next thirty years and estimated that Ireland would potentially receive a total of up to €2 billion in grants, with a further €1 billion in loans available up to 2024 should Ireland decide to borrow same. The needs assessment indicated that Ireland’s contributions to the “Next Generation EU” package would be the second highest in Net % GDP terms in the EU. The amounts in this needs assessment have been overtaken by European Council conclusions, as agreed by leaders on 21st July although Ireland remains a significant net contributor to the recovery fund.

Irish contributions to the EU budget are expected to rise over the coming MFF period from approximately €3 billion in 2021, to over €4 billion in 2027, an average of €3.5 billion. Exact contributions to the repayment of NGEU borrowing are yet to be determined (and will depend on whether new Own Resources are agreed) but are expected to be significant.

At this time of crisis the Covid recovery funds are needed now, but will be paid back over 30+ years. It is important to remember that Ireland has benefitted greatly from EU membership in economic (single market access), social, environmental, and financial terms (net €40+ billion receipts). We stand ready to demonstrate solidarity with those most in need now.

For the period 2021-2027 and consistent with the current MFF, lump-sum corrections will reduce the annual GNI-based contribution of Denmark, Germany, the Netherlands, Austria and Sweden. Ireland did not seek such a lump sum contribution as it would not have been appropriate to do so. 

In respect of the final agreement by EU leaders, Ireland has:

- Protected the CAP Budget for Ireland and successfully reversed the damaging cuts proposed – including a special allocation of €300 million in recognition of the challenges our agricultural sector is facing.

- Secured a significant €5 billion Brexit Adjustment Reserve to address the impact on Member States and sectors most affected. The exact criteria for disbursements under the Reserve remain to be worked out but we will be working to ensure a significant share for Ireland and affected sectors.

- Secured an increase in the share of customs collection costs retained by Ireland (now 25%), will help address infrastructure and other Brexit costs.

- Secured significant EU funding for Ireland under the recovery plan to target the immediate response to the Covid crisis (ca. €1.28 billion) in 2021/2022, with further funding in 2023 to be targeted at those most impacted economically by the crisis.

- Secured structural funds worth over a billion euro for our regions.

- Secured a special allocation of €120 million for a new PEACE PLUS programme, to which Ireland and the UK will also contribute, to build and continue the work of the current PEACE and INTERREG programmes in a post-Brexit context.

- Also welcomed the strong climate target for EU funds (30% of total budget) in support of the Paris Agreement; the Just Transition Fund will benefit areas including the midlands.

- Secured very substantial budgets for other priority programmes: Horizon Europe, Erasmus+ and the EU’s neighbourhood and development cooperation programme. Government will ensure that Departments and agencies work to make sure we maximise Irish draw-down from relevant programmes.

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