Increases in Irish contributions to the European Union as a result of Brexit should be limited and our agricultural subsidies defended, an Oireachtas committee has said.
A report from the Committee on Budgetary Oversight, published in advance of the EU’s next multi-annual funding framework (MFF) which was published earlier today, found that a reduction in funding under the Common Agricultural Policy (CAP) would have a “detrimental effect” on both the Irish agricultural sector and the economy as a whole.
It flagged the CAP in particular due to concerns it may be in line for spending cuts because it is the EU’s largest expenditure item. The imminent loss of British contributions to the EU’s budget may result in a shortfall of between €12 billion and €14 billion per year. That will require member states to increase contributions and absorb spending cuts which could potentially be targeted at the CAP, the committee indicated.
Additionally, it noted the "significant challenge" posed to the State by Brexit and recommended that the new MFF include "funding and financial supports that offer a Brexit initiative to Ireland in order to counteract the impact of Brexit on the Border region in particular".
Financial protection
Fine Gael MEP Brian Hayes agreed that Ireland should be offered some financial protection from the negative effects of Brexit, but said the State should be prepared to pay more into the EU budget having “received so much from the EU for over 40 years”. He also agreed with the committee on Ireland’s CAP funding, saying it is “such an important source of funding for Irish farmers”.
Speaking after the publication of the MFF, Irish Farmers Association (IFA) president Joe Healy said while it is clear the Commission has moved to fill the Brexit gap, “they have prioritised other areas at the expense of the CAP, which is another setback for Irish farmers”.
“All sectors have shared in the economic revival, yet farmers have had their direct payments eroded by inflation. At the very least, farmers need a CAP increase in line with inflation,” he added.
While Brexit is a key concern for the Government, committee chairman Colm Brophy TD also said, "Member states must recommit themselves to programmes focused on aiding EU members most affected by migration and on combatting racism, terrorism and youth unemployment throughout the union."
Net contributions
Since joining the European Economic Community (EEC) in 1973, the Republic has received net contributions from Europe of almost €42 billion with the vast majority - or 80 per cent - of that used to support agriculture. Since 2014, the Republic has been a net contributor to the EU budget as a result of its relatively buoyant economic growth as measured in gross national income (GNI).
In its report, the committee said EU reliance on GNI figures to determine national contributions “results in Ireland paying a disproportionate amount towards the EU budget in comparison with its economic and fiscal capacity”.
The MFF is a regulation that sets out a seven-year budget framework for the EU. While it sets out a breakdown of funding by policy area and individual expenditure ceilings, it does not constitute the EU budget. The current MFF is due to conclude in 2020.
A position paper published by the European Parliament Committee on Budgets recognised the need to improve the structure of the MFF and proposed expenditure to fall under the following headings: a stronger and sustainable economy, stronger cohesion and solidarity in Europe, stronger responsibility in the world, security, peace and stability for all and an efficient administration at the service of Europeans.
