Irish share of €5bn EU Brexit fund could be slashed under French plan

Just under €1 billion of the fund was to be received by Ireland in pre-financing in 2021

Paris has proposed a different ‘allocation key’ that would result in extra money from the compensation fund going to bigger states such as France, Spain and Italy. Photograph: iStock

Paris has proposed a different ‘allocation key’ that would result in extra money from the compensation fund going to bigger states such as France, Spain and Italy. Photograph: iStock

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Ireland’s share of a €5 billion EU Brexit compensation fund would be slashed under French proposals to change how payouts are calculated. The move threatens to delay the arrival of funds as it has led to the re-opening of negotiations on the issue among member states.

Just under €1 billion of the fund was to be received by Ireland in pre-financing this year, with the possibility for further top-ups later. This is the biggest share allocated to any member states under the fund, which was agreed last year to support the EU countries hardest-hit by Brexit.

But the method of calculating each country’s share proposed by the European Commission has not been signed off by member state governments, and Paris has proposed a different “allocation key” that would result in extra money going to bigger states such as France, Spain and Italy.

This would come at the expense of 14 other countries and would hit Ireland the hardest, removing €200 million from the expected €1 billion that had been due to arrive this year, according to calculations by Belgian MEP Pascal Arimont, the European Parliament’s rapporteur on the Brexit Adjustment Reserve.

The Netherlands, Belgium, and Denmark – among the countries hardest-hit by the UK leaving the bloc – would also suffer along with 10 other member states, Mr Arimont said.

“The four big countries that will have more, much more, are not those that are the most affected,” said the Christian Social Party MEP. “If we do a Brexit Adjustment Reserve with the aim to cover costs in member states most affected, in my opinion then we should stick to that.”

Compromise

The issue is currently being thrashed out between national officials with the Portuguese presidency of the EU trying to broker a compromise to avoid delays to the expected payouts, which were designed to kick in quickly to be effective.

The French proposal is said to have the support of Italy, Spain and Greece, but diplomats said there was widespread recognition of the outsized impact of Brexit on Ireland and sympathy for its position.

“Ireland is hardest hit by the consequences of Brexit. The proposal by the Commission took this into account,” an EU diplomat said. “Efforts by Paris to change the allocation criteria would result in cuts for Ireland and more money for France. This doesn’t really make for a nice picture.”

France previously lobbied to increase its share of roughly €400 million in an attempt to get extra support for fishing communities affected by the reduction in access to British fishing grounds.

The fund was agreed as part of a hard-fought budget deal reached last summer and finalised late last year. Some member states are wary of revisiting the topic, which was part of a delicate compromise designed to bridge differing views between member states on budgetary matters and new rules tying payouts to respect for the rule of law.

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