Since 2014, Ireland has been what is termed a ‘net contributor’ to the European Union’s annual budget (Multiannual Financial Framework).
That is, we now put in more cash than we receive back.
Based on the principle that you should contribute more to the budget pot if you can afford it, this is not automatically a bad thing.
As things stand at present Ireland is forecasted to make contributions to the MFF from 2020-2023 of €2.9 billion, €3.1 billion, €3.2billion and €3.4 billion respectively.
For the year 2024, a contribution of €3.5 billion is being forecasted. That’s a fairly sizeable chunk of change, amounting to €12.6 billion.
To put this in perspective; each year we give the EU considerably more than the entire €2 billion generated by Ireland’s alcohol industry; an industry which supports 92,000 jobs.
Again, this is not necessarily a bad thing.
What is difficult to accept, and what is increasingly making a mockery of the fairness principle, is just how those contribution figures are being calculated – which has led to the situation where we are paying hundreds of millions more than we should.
This problem is not one that arose today or yesterday. It has been rumbling away for years now with no obvious signs of resolution.
Who doesn’t remember the charge of ‘Leprechaun economics’ made by the sneering economist Paul Krugman? Of course, if he said that now he might be charged with a hate crime. But that’s a mere aside.
The fact is however that financially and economically speaking we are still festooned in the garb of the little people and we are still paying well in excess of what we should be to our EU brethren.
This is despite the fact that back in 2018, a Report from the Dáil Public Accounts Committee made it crystal clear that we were being fleeced on a yearly basis because of the absurd way our overall national wealth levels were being assessed.
On other words, when the EU calculates the contributions we owe them, it does so by including the assets of multinationals that are resident here as part of our of national income.
Here is what PAC said at the time:
“The distorted picture they provide overstates debt sustainability and is costing the State hundreds of millions of euro each year in EU budget contributions. The Committee recommends that the Minister continues to pursue a legal basis for the adoption of alternative economic indicators in the State’s reporting at EU level.”
The impending financial and economic Armageddon has only served to give this matter an even greater urgency because come October’s Budget we are going to need every shilling at our disposal.
In many ways what is particularly infuriating is the fact that even in 2018, the Public Accounts Committee essentially had to plead with Paschal Donohoe and his senior staff to hurry the process up in terms of resolving this Flight of the Euro’s dilemma:
“The Minister should endeavour to make progress on the issue sooner rather the two to three-year timeframe indicated by the Secretary General of the Department of Finance.”
Admittedly a few hundred million euro here or there back in 2018 might not have seemed a hell of a lot to a Minister who with every breath repeated his mantra that the ‘fundamentals of the economy are strong and stable.’
Well, we are no where near being able to indulge in such luxuries now.
It almost seems absurd to say it, but we really need to stop paying hundreds of millions of euros to an EU budget that has no moral, whatever about ‘legal’ right to claim it.
This is by no means the only trouble coming down the tracks from our friends in the EU in terms of how the ‘wealth’ of our economy is calculated.
Only last week Paschal Donohoe again confirmed that while Ireland may potentially receive a total of up to €2 billion in grants under the “Next Generation EU” rescue package, Ireland’s contributions to that package will be the second highest in the entire EU.
In fact, the European Commission have estimated the recovery package will require contributions from Ireland of €18.7 billion from 2028 to 2058.
Do we really have to tell the Minister to start addressing these appalling ‘contributions’ issues once and for all? Isn’t that money badly and urgently needed to support Irish people in the recession that is coming on the heels of Covid-19?
Or is the government happy to keep paying the EU hundreds of millions of Euros in excess of what we should be contributing.