Monday 23 September 2019

With UK's exit, we'll be one of just nine net contributors to EU

The European Commission in Brussels
The European Commission in Brussels

Shona Murrray

The European Commission's opening shot for negotiations on the next EU budget calls for a bigger cash injection in spite of a smaller and less wealthier EU after Brexit.

The so-called Multiannual Financial Framework (MFF), would see an increase in "commitments" by the remaining 27 member states to €1.27 trillion.

This is in spite of the fact that the bloc will be reduced by one member state - a net contributor - but with a population of 65 million, punching a budget hole of around €12bn.

The increase relates to a 10pc increase in commitment for member states.

Ireland is also now a net contributor state - one of nine only - and its total budget contribution will translate into 1.11pc of the gross national income (GNI).

The MFF negotiations trigger the start of the hardest-fought deliberations of EU members; highlighting the conflicting interests and requirements of different economies.

It lays bare the profound difference and priorities among certain governments.

In his speech to the European Parliament in January, and nailing Ireland's colours to the mast - conscious of the difficult talks ahead - the Taoiseach said Ireland was willing to pay more in to the budget.

This was in spite of the reduced size of the bloc and our new-found position as a net contributor.

Part of our willingness to do so is undoubtedly influenced by our positioning as good Europeans who've gained significantly since joining in 1973. But crucially, the Government will be calling on all of its EU partners for a return on its investment - in the name of solidarity throughout the forthcoming Brexit slog.

Our European credentials have never been in question, but we're on board with the controversial ambition of European Commission President Jean-Claude Juncker and other federalists who believe that part of the remedy for Brexit is to accelerate the development of the single market, and invest deeper in the European project in order to enrich and develop trade opportunities.

"The new budget framework will decide the future of our Europe of 27 and will determine our legacy to forthcoming generations," said Mr Juncker. "The level of the budget is not without consequence. It is directly linked to our ambitions."

The budget must be agreed unanimously by all member states. Already countries like Austria, the Netherlands and Denmark have hit out at Mr Juncker's apparent lack of restraint which bypassed the agreed cap of 1pc of GNI for member states.

He has added funding for new areas of focus for Brussels such as security and defence and migration. Mr Juncker's demands for more money for Brussels threaten to disrupt the remarkable period of strength and unity which followed Britain's Brexit vote.

It's worrying for Ireland, but opportune for hard-line Brexiteers as they can point to Brussels' intransigence and unyielding tendency to be always 'on the take'.

In one example of how fraught the budget negotiations will be, Dutch Prime Minister Mark Rutte hit out at the distribution of funding, saying "the costs of funding the budget are not shared fairly".

Brexit is already set to hit the Netherlands' economy hard. While Ireland will pay more, it may translate that we have stronger clout over how the money is spent; ensuring certain projects which suit our economy and demographic are protected.

Cohesion funds which support badly needed infrastructure and Erasmus, as well as Brexit-specific adjustment funding will likely form part of Irish demands.

Irish Independent

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