Totting up the many benefits for Ireland and EU of new budget deal


The new European financial perspectives accord is a much-needed success, writes Taoiseach Bertie Ahern

At the weekend the European Council reached an agreement on a new budget for the union for the period 2007-2013, known as the financial perspectives. It is an important achievement. It shows that the enlarged European Union can continue to work collectively and take difficult decisions on important issues affecting all Europeans. It also means that we can deliver on our commitments to the 10 new member states who joined the union during the Irish presidency last year.

I very much welcome this political agreement, because it brings to a successful conclusion negotiations that were launched during our EU presidency. I have congratulated the British presidency, and Prime Minister Blair in particular, on achieving this success. But most importantly, this agreement is a much-needed collective success which will help the union to move forward. All of the member states had to demonstrate the political will and the spirit of compromise necessary for an agreed outcome. The negotiations were tough, and the issues complex, but I believe that what we have achieved is a major boost for the union. It was especially important to reach this agreement in the wake of the difficulties the union has experienced during the past 12 months.

Overall the deal is an excellent one for Ireland. Our net balance over the entire period will be a positive one - approximately €1 billion. Our vital interests are fully protected. Ireland has been an EU member for over 30 years. We are now a successful, modern and dynamic economy and will become a net contributor to the EU budget towards the end of the next financing period.

Ireland's particular concerns during the negotiations were:

• to ensure that the financial commitments given to our farmers in the European Council's October 2002 agreement on the Common Agricultural Policy (Cap) funding were honoured;

• to provide continued significant EU financial support to our rural communities;

• to provide generous structural and cohesion funding for the new member states; and

• to ensure that the costs of enlargement were fairly shared between all the member states.

In addition, I urged our EU partners to continue to support our peace process through continued funding for programmes supporting reconciliation. We have been successful in this.

Agriculture has been a key issue for us in the negotiations. From the outset I argued that the European Council must deliver on the agreement we reached in October 2002 on future Cap funding. Any other result would have called into question the credibility of decisions taken at the highest level in the EU. This was a matter of principle for me. The European Council's Cap agreement will be honoured and our Cap funding will be secured to 2013.

Under the terms of the deal, our Cap receipts are estimated to be over € 10 billion. I'm very conscious that our farmers are now facing up to the challenge of implementing far-reaching Cap reforms. As they work to ensure that Irish agriculture meets the growing competitive challenges on the international markets, they deserve the certainty of the future Cap funding we agreed in 2002.

During these negotiations I worked hard to obtain a good result for Ireland on EU support for rural development. As a result, the amount available to Ireland under this heading is substantially greater than what was originally proposed. While the precise details remain to be finalised by the commission, it is expected that the amount should be in the region of €1.9 billion. This will ensure that our rural communities will continue to receive EU aid as they modernise and adapt to the reformed Cap.

In addition to this important result on rural development, we reckon that Ireland will also receive some €800 million in regional funding up to 2013. This money will be spent in the Border/midlands/west and southeast regions, in accordance with EU rules for regional development funding.

We have always supported generous structural and cohesion funding for the new member states. It is only right that we should show the same solidarity with the new member states as was shown to us over the past 30 years.

The funding provided to the new member states, under the agreement, should ensure that they grow and develop into important new markets for Ireland.

It is also only fair that the costs of enlargement should be shared equally between all the member states. This inevitably meant that the UK had to forgo part of its rebate. The UK rebate was first agreed in 1984 when Britain was not one of the richest member states and the EU had not enlarged to include much poorer states from eastern Europe. From the outset of the negotiations, this was one of the most difficult issues to resolve and required a significant level of compromise and political leadership.

I am very happy that my colleagues on the European Council agreed with my request that the EU should continue to strongly support the peace process in Ireland. The new budget includes an amount of €200 million for the future continuation of the EU's Peace programme. The funds will be spent in Northern Ireland and the Border counties on a range of cross-Border and cross-community projects supporting peace and reconciliation in Ireland. In addition, continued EU support for the International Fund for Ireland is also envisaged as it begins to wind down its operations.

It was important for us that any deal on the budget should last for the full term to 2013 and would not be reopened. We were always willing to consider a mid-term review of the agreement on condition that the review outcome would not take effect until after 2013. The agreement provides for a comprehensive review of the budget deal and will address all areas of the union's policies. The findings of the review will shape future budgets. However, our strong position, which is shared by a large number of other countries, is that any decisions cannot take effect before the end of the next financing period, ie January 2014 at the earliest. Decisions at that point must be taken by unanimity.

This weekend's budget agreement puts an additional emphasis on education, research and development, and training and development. This is consistent with the strategic moves we made in our recent national Budget which looks very much to the future.

The deal on the EU's future funding was crucial. It concludes a major negotiation which closely engaged the heads of state and government of all 25 member states. I think the result provides conclusive evidence that the enlarged EU can work together effectively in the collective interests of all our citizens. I have emphasised that we have to get away from seeing these negotiations solely in terms of winners and losers.

This deal was about our common future in a world which is rapidly changing and where we have to work together if Europe is to meet the aspirations of our people for jobs, social solidarity and the promotion of European values.