European Budget

Published: October 29, 2013
Categories: Sligo Champion Articles, Euro/Finance

Most people never think about the European Budget, yet they are glued to every detail of our own National Budget. The country is at a standstill for 48 hours while we wait, listen to and then digest the details. The question uppermost in our minds is how does this budget affect me and my family? How much did I lose? Will I still qualify for my payments? How could I be in the higher tax bracket? How come my take home pay is so little? These are just some of the many questions people ask after the budget.

Ministers are rolled out on TV and radio to answer those questions and to defend the cuts or in the case of the opposition, to assure you they would have done a much better job.

 

It takes a week, or if there is a serious issue to be resolved, maybe two to three weeks for the talk to die down. Yet the European Budget of almost €1 trillion passes largely unnoticed. Yes it is for 7 years, yes it is for 28 Member States and yes it is only 1% of EU GDP, but it matters.

 

It matters for the Common Agricultural Policy, the Single Farm Payment, which is a core income for many Irish farmers. It matters for Rural Development, which helps fund LEADER companies which make a very significant contribution to community projects, to small businesses and other rural actors.

 

It matters to the Social Fund, much of which goes to Education and retraining, especially for the unemployed. It matters to Regional Development Funding, which helps fund roads, tourism initiatives and provides seed capital for start up businesses.

 

It also matters to the Common Fisheries Fund, the Globalisation Fund for redundant workers, the Food Aid Fund, the Solidarity Fund and for Research and Development funding.

 

But where does this money come from – it’s a lot of cash, €1 trillion. All Member States contribute to the Budget, but some are net contributors - they give more than they get e.g. U.K., Germany and France.

Ireland still receives more than it contributes and while we had expected to become net contributors by 2014, the recent crisis has put that off for some time.

 

However, at some point we will find ourselves in that situation and it will be interesting to see if the tenor of the debate will change. Will we still want to see big European Budgets when it costs us more? Our colleagues in the UK fought tooth and nail to cut back on the current budget, indeed we nearly lost PEACE Funding as a result and CAP could have been in trouble.

 

It’s important that Irish voters have some knowledge of the EU budget, after all it is their money too and how it’s spent matters. It’s also worth noting that well in excess of 90% of the Budget goes back to the Member States, but not to the same Member States that contributed the money. So far we have been on the positive side of that divide, but when this changes, at least it will mean that our economy has recovered.