GDP surge means we will have to pay more to the EU but is it €380m or €280m?
Our contribution to the EU budget will mean a big increase as a result of the controversial higher Gross Domestic Product figures that emerged recently, Minister for Finance Michael Noonan has confirmed.
Minister Noonan confirmed that the figure would be higher in a reply to Fianna Fáil’s Finance spokesman Michael McGrath in the Dail.
However, his reply did not specify exactly how much the increase would be.
He said that under current estimates the figure would be €380m but when ‘mitigating’ factors are included it could be lower at €280m.
“We currently estimate the impact of the Central Statistics Office revision on our EU Budget contribution for 2017 at c. €380m,” Mr Noonan said.
However, other mitigating factors mean the overall increase in the EU budget contribution is now estimated to be in the order of €280m when compared to the forecast underlying the Summer Economic Statement.
“It must be emphasised that the final impact depends on a number of variables including the size of the overall EU budget for 2017 (which is not due to be agreed until November 2016), GNI movements in other EU Member States and other EU budget developments.”
Last week the Central Statistics Office said that Ireland’s GDP growth was up over 26pc last year but the figures were inflated by contributions from activity by multinationals that did not reflect underlying growth in the Irish economy.
Read more: Could leprechaun economists yet precipitate an Irexit? Or predict crocks of gold for all?
The figures were distorted by a number of factors including tax inversion deals and the purchase of aircraft by leasing companies and were dubbed ‘leprechaun economics’ by Nobel economist Paul Krugman.
Read more: CSO won’t change how it makes up economic growth
The findings suggested Ireland’s economy in 2015 grew at the fastest pace on record for any country in the OECD.
But the surge is mostly explained by the open Irish economy and its use as a base for international companies.
Read more: Leprechauns, planes, and even Soviet Russia: the reaction
The calculations comply with rules set out by the European statistical unit Eurostat.
Article Source: http://tinyurl.com/kbwqb42