Ireland braces for bigger share of EU stimulus fund
Ireland will advocate for a recalculation of how funds are to be distributed across the European Union as part of a planned financial package to counter the economic damage from the coronavirus pandemic, in the hope of reach a more generous agreement.
The 27 national leaders are meeting by videoconference on Friday to discuss the proposals, which call for the European Commission to borrow money to distribute to member states through grants and emergency loans.
The package aims to bring the most aid to countries most affected by the crisis, such as Italy and Spain, and calculation projects show that Ireland is expected to receive a relatively small slice of the pie.
According to a breakdown of the figures circulating in Brussels, if the current package is approved, Ireland would be in line for € 1.9 billion in grants, which would be awarded to finance specific stimulus and reform projects, and would be reimbursed jointly later by the whole EU.
In addition, a varying level of other grants and around € 1 billion in loans would also be available, equivalent to an overall stimulus package of around € 3 billion.
But Ireland will also have to contribute to the common EU budget, and the overall balance between contributions and aid is unfair in its current form, argues the Irish government.
Taoiseach Leo Varadkar is expected to argue that the method of calculating the needs of EU member states should be changed. A significant part of the math is based on economic growth and employment over the past few years, which means Ireland’s past good performance works against it.
Ireland, along with other member states including Belgium and the Netherlands, believe the calculation should not be based on historical economic performance, but on estimates of the scale of the pandemic that has struck. specifically countries, officials said.
“The current plan combines the investment deficit that existed before the crown and the corona effect,” said a European diplomat.
As an open and international trading economy, Ireland is vulnerable to global trade shocks. According to June estimates from the Organization for Economic Co-operation and Development, the economy is expected to shrink from 6.8% to 8.7% this year, slightly below the average forecast of success in the group of rich countries. .
Ireland and Belgium, whose close trade ties with Britain make them among the most vulnerable to further economic shock at the end of the post-Brexit transition period on January 1, both ask that the The impact of Brexit is factored into the way the money is distributed among states in the next EU common budget.
The European Commission unveiled plans for the € 750 billion recovery fund and EU budget at the end of May, and Friday’s video conference is the first time national leaders have met to discuss proposals and exchange their positions. They are not expected to approve anything yet.
Most EU member states believe a physical summit will be needed to forge consensus on the issue and hope to seal the deal at a conference in Brussels in July if the health situation permits.