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Despite being one of the richest countries of the European Union, Ireland will continue to receive significant amounts of what can be termed 'Foreign Aid,' until 2007.
September 20, 2004: Last June, during the voting on the referendum on citizenship, an exit poll of 3.300 voters which had been commissioned by RTE Radio, found that 36% of yes voters at 166 polling stations agreed that the main reason for their vote was because 'the country is being exploited by immigrants.' Another 27% had agreed with the statement that 'there are too many immigrants in the country.' It may surprise some of those voters who believe that immigrants (the bulk of whom are here on approved work permits) are costing us lots of money, that we are still receiving large transfers from the European Union. Other European taxpayers are still funding us, with the largest shares paid by the Netherlands, Germany and Sweden. Germany has been the leading contributor to Ireland's net receipts of €34 billion since joining the then European Community in 1973-the amount would be considerably higher if stated in current money values. Today, Germany has many economic problems in particular in the former East Germany where unemployment is 20%. Earlier this month, the European Commission issued an analysis of the 2003 budget. In absolute terms, most of the funds went to recipients in Spain, France, Italy and Germany. However, on the basis of national income, Portugal and Greece were the main recipients, followed by Ireland and Spain. Among net recipients, the net balance – the difference between payments into the EU budget and returns in the form of operational expenditure – was highest for Portugal (2.66% of GNI-Gross National Income). Among net contributors, the balance was highest for the Netherlands (-0.43% of GNI), followed by Germany and Sweden. Only four countries benefited from EU money in 2003- Portugal, Greece, Ireland and Spain - while the rest were net contributors. In terms of cash per head, the funding amounted to a net receipt of €391.70 for each Irish national. At the other of the scale, Dutch, Luxembourg and German nationals pay €120, €125 and €92.7 respectively, while each Briton pays €46.50. In 2002, Irish Finance Minister Charlie McCreevy said that the 2001 net EU receipts in 2001, were equivalent to 4% on the standard rate of income tax and that the total in cash benefits since joining was almost equal to the then national debt.
The concept of net budget balances provides information on payments into and from the budget and not of all the financial, economic and political benefits deriving from EU membership.
Ireland is expected to become a net contributor to the EU budget in 2007, the year targeted for Ireland's contribution to aid for developing countries, to reach 0.7% of Gross National Product. The European Commission is proposing to generalise the principle of correcting any Member State’s excessive net budgetary burden- a principle that was acknowledged in 1984, when the UK rebate was introduced. A Generalized Correction Mechanism (GCM) has been proposed, the main characteristics of which are: triggering if net contributions exceed 0.35% of a Member State’s Gross National Income (GNI); contributions above this refunded at a rate of 66%; total refund volume limited to a maximum of € 7.5 billion a year, financed by all Member States based on their relative share of GNI. The introduction of the GCM should be accompanied by transitional measures for the UK in order to alleviate the financial impact of the changeover, over a 4-year period. The UK Government has ruled out any change in the existing rebate conditions. Estimated net budgetary balances for net contributors (average 2008-2013)
(*) When excluding administrative expenditure, Belgium and Luxembourg would appear as net contributors
[1]
Estimates based on areas controlled by the Republic of Cyprus.
Conclusion We have done very well in the financial support which we have received from other European countries over three decades. Our politicians used to talk about the obligations of the rich countries to help poor countries like Ireland on the 'western periphery' of Europe. As the boot is about to be switched to the other foot, the tune has changed. It's said that eaten bread is soon forgotten but we are still benefiting in aid from Europe at twice the rate which we have committed to help poor countries in 2007. When some of our fellow citizens complain about immigrants, we need to remind them of both our own recent and current history. -Michael Hennigan Our Comment feature has been incorporated in the: The
Finfacts Ireland News & Comment Service
from October 2004
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