Irish per capita income second highest in EU

 

Dramatic growth in the economy in the recent years has pushed the Republic into second place in the EU in terms of per capita income, the European Commission will announce today.

In 2000 only Luxembourgers will produce more per head in gross domestic product (GDP) terms, the Regional Affairs Commissioner, Mr Michel Barnier, will say in Dublin today when signing the Irish Community Support Framework (CSF) agreement.

This structural funds programme will allocate some £2.9 billion in EU structural and cohesion funding to the Republic in the period 2000-2006.

Mr Barnier will also announce that of the £2.5 billion in structural funds, some £1.4 billion is due to go to the South and Eastern regions of the State.

The balance is targeted at the Midlands, Western and Border regions, which have retained their eligibility for full Objective One funding. The State will also receive some £450 million in Cohesion funding targeted at major infrastructural projects.

Irish officials will point out that allocations are based on performance in the mid-1990s and will plead that GDP figures on which structural fund payments are based overestimate the real wealth of the Irish economy.

In the Republic a better picture of national income is given by looking at gross national product (GNP), which excludes profit repatriations made by multinational corporations and which is some 15 percentage points below GDP.

GDP figures for 1999 show the Republic in fourth place in the EU in per capita terms, behind Luxembourg, Denmark and Belgium, but growth of 8 per cent this year will push the State up the league to second place.

The CSF programme agreed between the Government and the Commission is understood to be largely based on the priorities set out by the Government in the National Plan, with the exception of some of the EU funding suggested for productive investment, which is being reallocated to training and other aids to competitiveness.

The Commission is understood to have argued that, given the growth in the economy, investment in extra productive capacity could add to the overheating of the Irish economy. Mr Barnier arrived in Dublin last night and met both the Taoiseach, Mr Ahern, and the Minister for Finance, Mr McCreevy.