EU budget hike unlikely for Ireland next year following massive growth in 2015 GDP – Hayes
Brian Hayes MEP today said that recent speculation of a massive increase in Ireland’s contribution to the EU budget following the publication of the 2015 GDP figures is now highly unlikely.
“Ireland is no longer a net recipient to the EU budget. That means that we are no longer relying on the EU budget from Brussels and our voice at the EU decision making table will be more significant in the future. It was in 2014 when we became a net contributor to the budget – the first time ever. With more contribution comes more political clout in devising the budget and setting the rules. It is also a good thing that we can now share with other newer Member States the benefits that we’ve gained over the past 40 years of EU membership. Since joining the EU we have received from the budget over €44 billion.
“The speculation over the summer that we would see an increase in our EU budget contribution by €280 million next year, due to the once-off spike in our GDP growth rate for 2015 of 26% is now discredited.
“Commissioner Georgieva (EU Commissioner for Budgets) has explained to me, (see below reply) that the EU budget is a GNI-based resource, ie Gross National Income. Our contributions are calculated on the basis of GNI, not GDP. In an open economy like Ireland, the difference between GNI and GDP can be huge. Our GDP growth rate will always be higher than GNI since GDP is heavily influenced by the multinational sector and profits are very often repatriated to the US and other locations. GNI does not account for repatriated profits.”
“Additionally, our budgetary contribution is based on a complex averaging method where other years are factored into the calculation. It is also dependent on the GNI performance of other Member States.
“Commissioner Georgieva has confirmed that the CSO has to inform the Commission of the final GNI figure for 2015 and this will be validated by Eurostat. The final decision on our GNI figure will be communicated in October and there will be no negotiation after that.
“The bigger issue for Ireland’s contribution to the EU budget is not radical moves in Irish GDP but rather the likely impact of Brexit on future Budget Contributions. That’s why we need to be prudent in the upcoming budget. Our priority for the coming years must be to manage our public finances responsibly.”