IRELAND IS in danger of focusing on maintaining its large agricultural share in the new EU budget, rather than seeking increased EU expenditure on areas which may be more beneficial to the State in the long term, such as research and development, Prof Alan Matthews of Trinity College Dublin has warned.
In a paper to be delivered at the Economic and Social Research Institute (ESRI) and the Foundation for Fiscal Studies Budget Perspectives conference today, Prof Matthews examines Ireland’s role in the negotiations on the next EU medium-term financial framework scheduled to begin early next year when the new commission takes office.
Pointing out that Ireland will be a net contributor to the EU budget for the period covered by the framework, which begins in 2014, Prof Matthews says “it is important to start a discussion now on what Ireland’s priorities for these negotiations should be”.
The Government submitted proposals to the commission last year as part of a year-long consultation on possible reforms to the EU budget which examined new sources of EU revenue, the structure of spending priorities and improvements to the management of EU finances.
While Prof Matthews broadly welcomes the Government’s proposals, particularly its suggestions on sources of EU financing, he cautions against focusing too much on securing agricultural funds. He said Ireland’s needs have changed since the last budgetary framework was agreed. The “self-interested rationale to seek to maintain expenditure in certain areas” was not limited to Ireland, but was a condition of the EU system.
In particular, the uneven distribution of expenditure and system of net transfers which characterises the EU budgetary process, inevitably means member states favour expenditures that boost their own net transfer. This prevents a more efficient, rational deployment of EU resources.
“Other member states will also approach the budget negotiations from the perspective of minimising their net national contribution or maximising their net national transfer, so there is a real danger that the outcome could be very far from the budget that Europe needs to meet the global challenges that it faces,” he said.
Prof Matthews argues some kind of mechanism “to separate the distributional consequences of EU budgetary decisions from their substantive impact” needs to be introduced for best use of funds.
