John Perry (Sligo-North Leitrim, Fine Gael) | Oireachtas source

I am pleased the Deputy tabled this question because the Irish Presidency fought with some success on this issue. The regional aid guidelines enable the State's industrial development agencies to pay grants, at enhanced rates, to businesses to support new investment and new employment in productive projects in Ireland's most disadvantaged regions. This helps the convergence of these regions with the more advantaged regions of the Union. All such grants come from the Exchequer, in other words, there is no EU or other external funding.

The new guidelines were adopted by the Commission on 19 June 2013. There are no provisions or means for a review of the content of the guidelines.

European regions eligible for regional aid are divided into A regions which are the most disadvantaged within the Union in terms of economic development and C regions which are also disadvantaged, but to a lesser extent. All Irish regions are classified as C regions, both for the current 2007-2013 regional aid map and for the upcoming 2014-2020 map.

For the current 2007-2013 map, the BMW region was designated as an economic development area because it had moved ahead of the A status that it had in 2000-2006. The guidelines stipulated that areas such as the BMW region would be granted economic development status for the 2007 to 2013 period only. As a result of this designation, the BMW region was effectively given a derogation to grant slightly higher aid rates to assist the transition from A to C status.

Both the current 2007-2013 regional aid guidelines and the upcoming 2014-2020 guidelines outline that the aid intensity in standard C areas must not exceed 30 % for small enterprises, 20% for medium-sized enterprises and 10% for large enterprises.

Additional information not given on the floor of the House.

These rates are all 5% less than currently available in the BMW region, but as I have stated, that region cannot be afforded special economic development status under the next map.

My Department is consulting stakeholders on the drafting of the 2014-2020 Irish regional aid map. Economic data such as unemployment and gross domestic product for all counties, including those counties in the BMW region, will once again be analysed afresh when deciding which counties will be included in the next regional aid map.

The initial regional aid guidelines proposal from the Commission, published in May 2012, presented significant challenges for Ireland. This proposal prohibited aid to large enterprises, reduced our population coverage from 50% to 25% and reduced aid intensity rates. Following sustained engagement with the Commission and like-minded member states at ministerial and official level, Ireland secured entitlement to maintain regional aid qualification for areas accounting for 50% of the country's population, with coverage actually slightly increasing to 51.28%.

On the key issue for Ireland, aid to large enterprises, a compromise was agreed with the Commission that will allow member states to provide investment aid to large enterprises for new economic activities and diversification of existing enterprises into new products or new process innovation. Aid intensity rates were also maintained at their current levels.

In essence, the final version of the regional aid guidelines negotiated by Ireland and like-minded member states represents an important step in ensuring Ireland, and the EU in general, maintain the ability to strengthen the EU economy and promoting cohesion between regions.

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