Written answers

Tuesday, 19 July 2016

Department of Finance

EU Budget Contribution

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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225. To ask the Minister for Finance further to Parliamentary Question No. 75 of 28 January 2016, if the revision to 2015 GDP published this week will lead to a significant increase in Ireland’s EU budget contribution; if he will provide an estimate of what the contribution was expected to be prior to the CSO data and what it is now expected to be; and if he will make a statement on the matter. [22880/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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Member State contributions to the EU Budget are based upon a formula which includes Traditional Own Resources (customs duties), a VAT-based payment and a residual balancing component paid in accordance with each Member State's share of EU Gross National Income (GNI).

On 12 July 2016, the CSO released updated National Income and Expenditure (NIE) Accounts for 2015 which included a very significant upward revision in Ireland's GNI for 2015. As mentioned above, GNI is an important input into the calculation of Ireland's EU Budget contributions, representing c.75% of our total contributions.

We currently estimate the impact of the CSO revision on our EU Budget contribution for 2017 as c. €380m. However, other mitigating factors mean the overall increase in the EU budget contribution is now estimated to be in the order of €280m when compared to the forecast underlying the Summer Economic Statement (SES).

It must be emphasised that the final impact depends on a number of variables including the size of the overall EU budget for 2017 (which is not due to be agreed until November 2016), GNI movements in other EU Member States and other EU budget operational developments.

The estimate is also premised on the likely ratification of the Own Resources Decision (ORD) by all Member States this year (it is now ratified by 27 out of 28 Member States). The ORD is required at EU level to translate political agreement on the methods for financing the EU Budget for the current Multiannual Financial Framework (MFF) 2014-20 into legal form.

Our revised forecast for 2016, assuming ORD ratification by all Member States, is now €2,145m. The increase compared to PQ 75 of 28 January 2016 is largely due to the likely implementation of the ORD with retrospective payments associated with 2014 and 2015.

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