DUBLIN: Ireland will escape being hit with an extra €280m in EU budget contributions due to the 26pc spike in the country’s wealth which was dubbed “leprechaun economics”.
The huge surge in Gross Domestic Product (GDP) caused by multinational companies’ accounting changes was revealed in late July. What was expected to be a 7.8pc increase in GDP for the year 2015, was suddenly shown as a 26pc increase.
Finance Minister Michael Noonan said the change could mean having to pay €380m extra to the EU coffers – but a number of technical issues could reduce this to a final bill of €280m.
However, Dublin Fine Gael MEP Brian Hayes yesterday said he had established that it was most unlikely that Ireland will be whacked with an extra €280m bill. Mr Hayes said he had been told by the EU Budget Commissioner, Kristalina Georgieva of Bulgaria, that the GDP will not be the basis of Ireland’s budgetary calculation.
Instead another measure, Gross National Income (GNI), will be used. While GDP measures a country’s total economic output, GNI effectively excludes money generated by the multinationals which is ultimately sent abroad. Mr Hayes said that, because of the dominance of the multinationals in Ireland, GDP is frequently much higher than GNI.
“The speculation over the summer that we would see an increase in our EU budget contribution by €280m next year, due to the once-off spike in our GDP growth rate for 2015 of 26pc, is now discredited,” Mr Hayes told the Irish Independent. The Fine Gael MEP said it would be next month before the Commission could give Ireland the final bill.
The CSO in Dublin has to send the final GNI figure to the EU, where it has to be validated by the EU’s statistical service, Eurostat, which is based in Luxembourg.
Ireland has received a total of €44bn in EU payments since joining in 1973, mainly in farm, regional and social grants.
