Mr. Kevin Cardiff:

Ireland is a net contributor, with its largest receipt being under the Common Agricultural Policy. Our payment in is based on our national income and our receipts are based on other characteristics. Naturally, being an agricultural country, we get more from CAP than other countries that have less agriculture. This probably means that, if the only basis for judgment is the net position, we have done a good deal better over the years than other countries that are significantly poorer, but that is because they do not have agriculture while we do. CAP forms 40% of the EU budget, so we got a large chunk of that budget because of our agriculture, while other countries got structural funds that did not amount to as much. If people were to see the figures, they would believe that Ireland had done well out of the EU. Even with our current annual income, we seem to be doing well. There are countries in the same income category that are getting less or paying more in net terms because they do not have the agricultural side of the matter. I have the figures in my pack and I will send them to the committee. Historically, we have done well if that judgment is only based on net contributions, but that is not the full basis. CAP is there for a reason - namely, Europe wanted food security and rural communities to be retained. We have contributed more than the average to that.

The question of why we are hitting the net contributor position now when people are still reeling from several bad years comes down to a simple formula, as was mentioned. The moneys expected are portioned out at the beginning of a period and every country pays a certain proportion of its GNI. For Ireland, GNI has increased more quickly than expected. I do not know the figures because I no longer have responsibility for them, but I bet that my former colleagues in the Department of Finance were not expecting to hit net contributor status for another year or two. In 2006 it looked as though we were about to hit it, but our national income then fell off the cliff and we remained net recipients for a few years more. We are now a net contributor because our growth rates have been higher than expected. It is a negative, but only because of a positive development.

Apart from agriculture, many payments are judged according to the needs of the countries concerned. As a trading country, we ought to benefit over time from the fact that countries like Poland, the Czech Republic and Bulgaria will be brought up to the European average income levels because they will then purchase more of the goods and services that more developed countries like Ireland, Germany and the UK produce. Just as the rest of Europe felt in the 1980s and 1990s that there was some benefit in providing funds for Irish development, we are providing funds for Polish, Bulgarian and Romanian development.