EU moves likely to cost State more, says institute

Ireland stands to lose more than any other EU member-state in the current negotiations on the future financing of the EU, a briefing organised by the Institute of European Affairs was told yesterday.

The EU's Agenda 2000 negotiations, due to reach a critical stage at a special summit in Berlin in two months' time, are probably the most important for Ireland since the State joined the EU, the director of the Irish Business Bureau in Brussels, Mr Peter Brennan, said.

While the stated purpose of the Agenda 2000 negotiations is to come up with a means of coping with the enlargement of the EU, the rearrangement of the financing of the Union is central to the process.

Those states which contributed the most to the EU budget were winning the argument, Mr Brennan said, and so the states which were net recipients - including Ireland - would end up paying a price for EU enlargement.

Mr Brennan said Ireland's GNP per capita [as distinct from GDP per capita] was 82 per cent of the EU average. "We are in the lower quartile of EU member-states," he maintained, yet the image was now abroad that Ireland was one of the richer EU member-states.

He was speaking at the launch of a report called Agenda 2000: Implications for Ireland published yesterday by the Institute of European Affairs. The report forecasts that Ireland's contribution to the EU will double from £500 million in 1997 to over £1 billion in 2006. Meanwhile, the structural and cohesion funds received by the State could fall "in the worst case" to 10 per cent of what they are now.

"If we manage our affairs correctly, the country can manage without structural funds," according to Mr Brendan Lynch, a project leader involved in preparing the report. "However, the case can be made for continued receipt of the funds to ensure the job is done." Ireland has often been held up as an example of how a state can benefit from structural funding, he said, but "it would ruin the example if the job was not done properly".

Mr Brendan Kearney, chairman of the working group on agriculture involved in the report, said world trade prospects have been dampened by the economic crises in Asia and Russia. He said using EU funding to promote rural development rather than simply funding farm production could be more beneficial in the long term.