Pearse Doherty (Donegal, Sinn Fein)
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338. To ask the Minister for Finance to confirm that no additional tariffs over what was already in place by the end of March this year were assumed in the baseline economic projections contained in the Annual Progress Report; and if he will make a statement on the matter. [25655/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Annual Progress Report (APR) was published on 6th May setting out my Department’s spring forecasts.

The baseline macroeconomic forecasts published in the APR were produced during March and endorsed by the Irish Fiscal Advisory Council at end-March. The baseline forecasts were prepared on the basis of the tariff landscape in March and were calibrated on the assumption that no additional tariffs would be introduced.

Given the significant change in the global tariff landscape in recent weeks, an alternative scenario was also included in the APR to explore the potential impact of the additional tariffs that were introduced in April.

Given heightened uncertainty at present, I have stressed that the numbers set out in the APR are more akin to scenario analysis. This is in line with the approach which others have taken internationally.

Pearse Doherty (Donegal, Sinn Fein)
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339. To ask the Minister for Finance to outline the impact on the Exchequer and general Government balance if money were to be drawn down and spent from either of the Future Ireland Fund or the Nature Climate and Infrastructure Fund in 2026; how with the transfers to and from these funds by treated by the mid-term planning; do these funds provide greater flexibility under the mid-term planning that would otherwise not be possible; and if he will make a statement on the matter. [25656/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Transfers from the Future Ireland Fund (FIF) and the Infrastructure, Climate and Nature Fund (ICNF) to the Exchequer increases Exchequer revenue. If this money is spent by the Exchequer, it increases Exchequer expenditure.

The Exchequer, FIF and the ICNF all fall within the General Government sector. Transfers from the Exchequer to these two funds, or vice versa, do not affect the General Government Balance (GGB) because they are simply transfers between two parts of Government. As such, drawdowns from the FIF or ICNF will not impact on the GGB, however when the funds are spent this will result in additional General Government Expenditure, worsening the GGB.

Both funds are to be capitalised by annual transfers from the Exchequer – 0.8 per cent of GDP per annum (from 2024 onwards) in the case of the FIF, and €2 billion per annum (from 2025 onwards) in the case of the ICNF.

By the end of 2025, circa €16 billion will have been transferred to the funds.

The Future Ireland Fund (FIF) is a long-term savings vehicle designed to help partly offset recognised expenditure pressures, including ageing, climate and the digital transition. Section 11 of the Future Ireland Fund and Infrastructure Climate and Nature Fund Act 2024, outlines that there is no drawdown from the Future Ireland Fund before 2041.

Section 21 of the Act sets out the drawdown from the ICNF for designated environmental projects between 2026 and 2030. This drawdown is a matter for Minister for Public Expenditure, NDP Delivery and Reform.

Under the revised EU fiscal framework, all Member States must submit a Medium-Term Fiscal and Structural Plan (MTP) committing them to an agreed expenditure path for a four or five-year period, depending on the length of the national legislature.

Annual compliance with the EU fiscal framework will be assessed in reference to a single operational indicator, net primary expenditure growth. As such, to comply with obligations under the EU fiscal rules, increases in net primary expenditure, even if funded by drawdowns from the FIF or ICNF, must not exceed the agreed expenditure path set out in the MTP.

As outlined above, no drawdowns will be made from the FIF before 2041, however, the legislation outlines how drawdowns from the ICNF are possible from 2026.

These funds do not provide additional flexibility under mid term planning, save for the fact that they are a source of financing for potential expenditure, as set out in the legislation.

Pearse Doherty (Donegal, Sinn Fein)
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340. To ask the Minister for Finance to provide additional information on the €-3,050 million in accruals in year 2025 in the Annex 3 of the Annual Progress Report outline the driver of the €5.7 billion swing from 2024 to 2025 and the substantial change from the information outlined in the Fiscal and Economic Outlook published in Oct 2024; and if he will make a statement on the matter. [25657/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The main driver of the accrual of -€3,050 million in 2025, as presented in Annex 3 of the Annual Progress Report, is the adjustment related to the Court of Justice of the European Union (CJEU) ruling, which amounts to -€3.3 billion.

According to the European System of Accounts, which is applicable to all EU Member States, all revenue from the CJEU ruling should be recorded in 2024, in alignment with the timing of the CJEU judgment.

The Budget 2025 documentation included a technical estimate indicating that €8 billion would be transferred to the Exchequer from the Escrow Account in 2024, followed by €6.1 billion in 2025. According to the accrual principle, all revenue from the CJEU ruling should be recorded in 2024, resulting in €6.1 billion being accrued in that year in the Budget figures.

At the end of 2024, a total of €10.9 billion had been transferred from the Escrow Account to the Exchequer, with an additional €3.3 billion to be transferred in 2025. The accrual adjustments related to the CJEU ruling have been updated to reflect this, with an accrual adjustment of -€3.3 billion compared to -€6.1 billion in Budget 2025.

In other words, the difference between the Budget 2025 and APR accrual figure is primarily because the Exchequer received more CJEU revenue in 2024 than the technical estimate made at Budget 2025.