THE DEPARTMENT of Finance suggested to the McCarthy expenditure review group that “clusters” of embassies could be closed, and that Ireland’s overseas aid budget could be cut by nearly €60 million.
One of the scenarios envisaged by officials in the department was the closure of most of Ireland’s embassies and consulates in North America, including Mexico and Canada. In a memo sent by the Department of Finance to the McCarthy group in February on possible cuts to the Foreign Affairs budget, officials outlined three options for the closure of “clusters” of embassies and consulates.
The first involved the closure of most missions in North America, including Canada and Mexico, and operating to a greater extent from the Washington DC embassy and the permanent mission to the UN in New York. A second scenario envisaged closing missions to “smaller” European countries, including many in eastern and central Europe and separate missions to the OSCE and the Council of Europe, while the third option was cutting back on missions in other parts of the world, mainly Asia.
“The direct and indirect political consequences of any of these measures will be significant,” the memo notes, adding that there would be notable drawbacks to any mission closures in the US or Europe.
“The most problematic area will, no doubt, be the possible closing of embassies in North America because of Irish business links there, the large Irish diaspora and the vastness of the area to be covered from the east coast,” it states.
“Ireland’s policy is to play a central role in EU affairs and the need over the next number of years for any help from our European partners in our economic recovery may be a significant factor in maintaining ambassadorial representation in all EU states.”
However, in its own submission to the McCarthy group, the Department of Foreign Affairs strongly advised against any closures.
“This department would be firmly of the view that mission closures now would be counterproductive to Ireland’s strategic interests and would carry a reputational risk disproportionate to the savings made in the short-term,” wrote David Cooney, the department’s secretary general.
The McCarthy group concluded that Ireland’s network of embassies and consulates should be reduced from 76 to 55.
On overseas aid, the Department of Finance suggested that, given the economic circumstances, the programme could be cut by a further €59 million.
The document also proposed that the Government abandon its aim of meeting the UN target of allocating 0.7 per cent of gross national product (GNP) to overseas aid by 2012, and extend the deadline by three years, a suggestion that was included in the McCarthy group’s final report.
Acknowledging the potential fallout of such a decision, the memo added that “undoubtedly, any further reduction or movement of the commitment timeframe will give rise to a lot of opposition from civil society and NGOs”.
In April’s emergency budget, the Government reduced the aid budget by €100 million, and in all the aid budget has been cut by just under a quarter, or €222 million, in the past year.
The Department of Finance also raised the question of financial oversight of the aid programme, noting that a recent Farrell Grant Sparks report “suggested that the current level of financial oversight is inadequate”.
The department added that discussions were taking place about ways to redeploy surplus staff into Foreign Affairs in order to “beef up our oversight and control regime”.
Finance officials also suggested that consideration should be given to “maximising the economic benefit to Ireland of our overseas development aid programme”.
