Thursday 22 February 2018

Any solution to deadlock on the EU-UK 'exit bill' will mean that Ireland must pay more

Commission President Jean-Claude Juncker (AP Photo/Olivier Matthys)
Commission President Jean-Claude Juncker (AP Photo/Olivier Matthys)
John Downing

John Downing

We had better get used to it. Once the UK leaves the EU, Ireland will pay more to the Brussels coffers.

There is no point pretending that we can even guess how much more. But it is well worth doing a stock-take of what EU money benefits we have got - and what kind of payments we are now in line to pay.

Much depends on the vital money-side of the UK's divorce settlement. Park the ill-mannered spat between British Prime Minister Theresa May and EU Commission President Jean-Claude Juncker. We know there is no goodwill on either side of the equation at this stage. But there is ample time for good sense to dawn in due course.

Informed speculation now is the UK's pay-off bill could be as high as €100bn - up from the €60bn figure which has been floating about in EU-land since the British voters opted to quit the EU on June 23 last year.

Let's forget the uber-Brexiteers in the London system who claim the country can just "stop the payment clock and walk".

The Brussels' answer to that one is the UK can also forget any kind of decent EU trade deal if it really pursues any variant of that walk-away strategy. So, no progress will be made until the money issue is resolved along with citizens' rights for EU nationals living in the UK, and British people living in the other 27 nations of the EU.

Read More: Q&A: What are the ground rules?

Mrs May has argued in vain that the post-divorce relationship, especially in the crucial issue of EU-UK trade, should be dealt with in parallel with those other issues. Ireland has good reasons to be supportive of the British to minimise future uncertainty for things like Irish food exports to Britain. But no such thing will happen.

What must be agreed is a "methodology to settle final accounts" with settlements which must be paid out over anything up to a decade. It is all achievable - providing the "rhetoricometer" is put back in the cupboard. The UK is currently the EU's second biggest net budget contributor, a ways behind Germany. British net payments are about €14bn per year to the €140bn EU yearly budget. The EU budget is of itself quite modest when you consider it is not even three times that of Ireland's which is among the smallest EU states. Britain has already signed up to a funding scheme which runs until 2020, and it has other obligations like €6bn funding for Turkey in refugee aid.

There have always been tensions over British payments going to the EU farm funding. There will be more flashpoints following extra demands from countries like France and Poland. There was a time when Ireland got €5 back for €1 remitted to the EU. Added to significant EU farm funds were big social and regional fund grants, especially through the 1990s. The total benefit from 1973 to date has totalled some €42bn.

As Ireland's economic development increased, logically what were really EU catch-up grants tailed off. For the past three years Ireland has been a small net contributor. In 2015 it was a modest €33m. But Ireland's relative prosperity meant that would increase. The UK's departure will hasten this process.

Irish Independent

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