Thanks to our relative economic strength and the long-term impact of Brexit, Ireland is expected to make a comprehensive contribution to the EU budget for some time to come, ”said a member of the European Court of Auditors.
Tony Murphy also commented that the impact of US multinationals’ profits on Ireland’s economic performance.
Last year, Ireland contributed more than the EU budget of $ 229 million, which represents 0.08 percent of Ireland’s gross domestic product (GNI).
Murphy, Ireland’s representative in court since 2017, said Ireland’s total contribution is likely to increase further as the UK’s annual contribution is lost.
As the GNI of a member state rises, so does the EU budget.
“[Ireland’s] Total national income was $ 241 billion in 2017 and $ 267 billion in 2019. So, it’s on the rise, it’s likely to increase. This means that if we take the UK contribution, everyone’s contribution will increase.
According to the Annual Report of the Court of Auditors, the total budget of the European Union for 2019 was $ 164 billion, of which Ireland contributed $ 2.3 billion.
Most of Ireland’s donations come from the state treasury. Third-country goods entering Ireland are subject to $ 380 million in customs duties and $ 275 million in third-country VAT contributions.
As part of Ireland’s books presence on profits registered by US multinationals, the size of Ireland’s total contribution to the European Union has soared since 2016.
This is related to the fiscal deficit in 2015, when Ireland’s GDP rose from 7.8 per cent to 26 per cent after several US multinationals relocated to Ireland and restructured assets to cut tax bills.
The Central Statistics Office (CSO) has developed a new indicator for this phenomenon, which the famous economist Paul Krugman calls “leprechaun economics”. “Corporations to give a more realistic view of the size of the Irish economy.
However, when calculating Ireland’s total contribution to the EU budget, the EU Statistics Agency Eurostat is the EU’s standard GNI approach that applies to all member states, rather than the GNI revised its calculations.
Figures compiled by CSO show that in 2016 the revised GNI in Ireland was $ 174.7 billion, while the standard GNI was $ 220.7 billion.
In other words, high numbers maintain the influence of multinational profits and property ownership.
The years 2017 to 2019 show the same result.
The revised GNI in 2017 was $ 186.2 billion and the standard GNI was $ 239.2 billion; The revised GNI next year was $ 198.7 billion and the standard GNI index was $ 257.5 billion.
The revised GNI for 2019 was $ 213.7 billion, while the standard GNI was $ 275.5 billion.
Due to the high GNI figures, the knock-on effect is the largest contribution to the EU budget.
The member of the Court of Auditors acknowledged the impact of the booking of multinational profits in Ireland on the question of the country’s total contribution to the European Union budget.
“It’s true, it’s influential in terms of‘ leprechaun economics ’. [net] The donation would include what you mention, ”he said via a video link from Luxembourg.
Murphy added: “Eurostat GNI is calculated on the basis of statistics and guidelines, so the budget is calculated on the basis of whether there are inaccuracies in it. We are following a system.”