Government decision not to draw down EU fund is ‘unforgivable’, says Sinn Féin MEP Chris MacManus

The Government had yet to apply for an approved €915m in grants as of last week from the EU’s pandemic recovery and resilience facility The EU must approve Ireland’s request for a delay, which can take three months

European Commissioner for the Economy Paolo Gentiloni and Public Expenditure Minister Paschal Donohoe signed an agreement saying the RRF funding was due at the end of March. Photo: Gareth Chaney/Collins

Sarah Collins and Jon Ihle

The Government’s failure to draw down €1bn in EU pandemic funding is “unforgivable” given the cost-of-living crisis, Sinn Féin MEP Chris MacManus has said.

“Even similar countries in size and wealth to Ireland like Denmark or Austria have drawn down funds, to the tune of hundreds of millions,” he told the Irish Independent.

“Given the cost-of-living crisis it is unforgivable that the Government has not got its act together to draw down our allocation.”

His comments come after the Government asked Brussels for an extension on two projects due to be funded by the State’s €1bn allocation from the EU’s €750bn pandemic recovery and resilience facility (RRF).

Ireland has requested to postpone the completion date of three targets linked to a social and affordable housing scheme “due to delays in the construction process and other implementation issues”, the Commission said in a statement.

“Ireland’s request to modify its plan is based on the need to factor in objective circumstances which make particular milestones or targets no longer achievable within the original timeline,” the statement said.

A scheme to promote private investment in energy efficiency is being delayed “due to unforeseen technical hurdles”.

It can take up to three months for the request to go through, as it has to be assessed by the Commission and then approved by Ireland’s 26 fellow EU member states.

The Irish Independent reported last week that the Government had yet to draw down any of its pandemic funding, which was approved in 2021.

While the EU money comes with conditions attached, Mr MacManus said the delay was likely due to “incompetence rather than a political decision”.

“Brussels will not wait interminably for Ireland to draw down its allocation,” said Mr MacManus. “Again, we have had zero political debate on the issue.”

The grants will be paid in five instalments between now and 2026. The payment request process for the first instalment began in December, according to a spokesperson for the Department for Public Expenditure and Reform (DPER).

Commission economy chief Paolo Gentiloni and Public Expenditure Minister Paschal Donohoe agreed that a first €395m payment would be made in March.

DPER said it anticipates a payment request will be made this summer.

Ireland is ultimately in line to receive well over €900m in pandemic grants up to mid-2026.

It is also entitled to apply for a similar amount in loans, but so far the Government has held off on that option.

The scheme is a lifeline for some economies, such as Italy’s, which is due to receive €200bn, although some of that money is held up due to concerns about the appropriateness of the projects it is supporting.

Ireland’s economy has had an unexpectedly strong rebound following the end of pandemic restrictions, with record tax receipts flowing into the Exchequer, so the need for EU grants is not especially urgent.

The RRF funding represents less than 1pc of the €116bn allocated for infrastructural investment under the National Development Plan.

Ireland will have to hit 109 milestones and targets associated with the funding to keep the EU money flowing until 2026.

The funding will go towards 16 investment projects and nine reform measures.

Apart from the €164m going to Cork’s rail project, there is €108m allocated to biodiversity and ecosystem support, such as rehabilitation of boglands, while €142m is set aside for a digital upgrade of the healthcare system.