Mr. Kyle O'Sullivan:

A word first about the position Ireland has taken so far in the negotiations. We have an overall objective, namely, to optimise Ireland's net budgetary position and establish a framework which supports growth and employment in Europe. Within this overall objective, the Government's approach has been guided by a number of priorities. The first is to have a properly funded and properly functioning European Union with the right mix of priorities, fair allocation of resources and a focus on jobs and growth. As members can imagine, in allocating funding for the next seven years, we are also setting out political priorities. It is, therefore, important that the allocations fit these particular priorities.

The second priority is to protect Ireland's receipts under the Common Agricultural Policy to the maximum extent possible. This is our overriding financial priority.

The third priority is the protection of Ireland's cohesion receipts to the maximum extent possible in the context of changing relative GDP per capita rates and pressure to concentrate funding on less developed regions.

The fourth priority is to ensure adequate resources to reflect Ireland's and Europe's needs and priorities in the areas of research, infrastructure and education.

The fifth priority is retention of the European Globalisation Adjustment Fund and the sixth is to ensure that any changes to the revenue side of the own resource arrangements have a minimal impact on our net contributions. I will say a word about net contributions in a moment.

The final deal will obviously be the result of a negotiation and it seems certain at this stage that it will result in a much smaller budget than that originally proposed by the Commission. This will involve trade-offs and compromises by all member states, including Ireland, and our negotiating tactics coming into next week's European Council must take account of that.

I should stress that the Government is acutely conscious of the importance to the Irish economy of European Union funding, in particular given our current national fiscal position. Negotiations on the multi-annual financial framework have been active since last September and the General Affairs Council, COREPER and the European Council have been fully engaged, as have Irish Ministers and officials in bilateral contacts. Irish embassies in EU capitals as well as our permanent representation in Brussels have also been intensively involved.

I draw members' attention to our national net position in a couple of the tables that were circulated to the joint committee to put these concepts into figures. I ask them to look at Table 10, Public Sector Receipts from and Payments to the EU Budget. I draw their attention to the bottom row, which sets out receipts and payments for 2011. The table states simply what we contribute and what we receive on an annual basis. Ireland's net position in 2011 was a net gain of €586 million. Members can see the history of the Irish position for every year going back to 1973. The €586 million figure is crucial to us in negotiations.

I draw attention to the line in Table 11, which indicates what parts of the EU budget provide the flows to Ireland. We receive €1.6 billion per annum from Pillars 1 and 2. The two relevant figures, €1.297 billion and €348 million, are shown at the bottom of the table. This is from where our income or flows from the European Union budget come. Of the total of €1.9 billion for the whole year, €1.6 billion is for agriculture. Clearly, therefore, this area is a key part of our considerations.

I ask members to look at a final graph which was, I believe, lifted from The Economist.