Deal! EU reaches agreement on budget and COVID-19 stimulus fund

Chips Lovell · 21-07-2020 6:19am #1

It was meant to last until Saturday night but only finished up this morning, making it one of the longest ever round of EU negotiations, but it looks like we have a deal.

Key sticking points included the amount and oversight of COVID-19 stimulus funds. Grants of €500 billion were originally proposed, but that's been trimmed to €390 billion, but with €360 billion of low interest loans. Request for a veto on spending by the so-called Frugal Four didn't come to pass, but there is a compromise in the form of a review mechanism, which allows them to pause spending for three months while a review is being carried out.

One of the other big sticking points was the so-called Rule of Law issue, mainly concerning Poland and Hungary, where there were calls to withhold funding from states who didn't uphold the rule of law. That hasn't succeeded in this round of talks, but by the sounds of the way it has been kicked to touch, it may be only a matter of time before there is some movement:

The compromise agreed by the leaders instead puts off designing a rule of law mechanism for another day with agreement to be made by a qualified majority of member states.

Haven't seen any details yet on how it all breaks down for Ireland.

Dufflecoat Fanny · 21-07-2020 6:22am

will personal loan rates drop now I wonder

LuckyLloyd · 21-07-2020 8:40am

Fantastic news, delighted they were able to get a deal through for the southern countries most badly affected by this. I assume we will be net contributors to the fund.

johnnyskeleton · 21-07-2020 8:48am

The great thing about the operation of the EU is that it usually manages to get a compromise, and this sounds fairly reasonable.

Ive been following the daily express coverage of the talks with morbid facination as each turn in the EUs negotiations was seen as a sign that the fragile Union would collapse, even though such robust debate is not entirely unknown to the EU. So I had to check what they made of this final compromise:

https://www.express.co.uk/news/politics/1312149/EU-news-coronavirus-recovery-fund-budget-summit-deal-Angela-Merkel-latest-update

Apparently its gone from a fragile trade bloc on the verge of collapse to a"federal SUPERSTATE" overnight!

Chips Lovell · 21-07-2020 9:25am

LuckyLloyd wrote: »

I assume we will be net contributors to the fund.

I would expect so, but I haven't seen how it's structured yet. All I've read is that it'll go to the countries worst affected. I don't know how that will be determined.

johnnyskeleton wrote: »

Apparently its gone from a fragile trade bloc on the verge of collapse to a"federal SUPERSTATE" overnight!

You'd almost think that they never paid attention to EU negotiations before?

Melanchthon · 21-07-2020 10:10am

Chips Lovell wrote: »

I would expect so, but I haven't seen how it's structured yet. All I've read is that it'll go to the countries worst affected. I don't know how that will be determined.

You'd almost think that they never paid attention to EU negotiations before?

If it's determined as talked about previously Ireland is going to get screwed by this with one of the lowest amounts received despite being more affected than a lot of European countries.

thegetawaycar · 21-07-2020 10:56am

I'd expect we will get a very, very small piece of this but I hope at least if we had any decent negotiator at the table our piece of the pie will be in the form of grants only.

We're a net contributor to the EU, have been hard hit financially by COVID and will be paying off debt until the end of time from when we were "encouraged" not to burn bondholders.

While I think the Southern countries will get a larger portion of the pie, lets be clear our budget deficit would be at their levels if we had the public health systems they have.

ancapailldorcha · 21-07-2020 11:19am

Melanchthon wrote: »

If it's determined as talked about previously Ireland is going to get screwed by this with one of the lowest amounts received despite being more affected than a lot of European countries.

Is Ireland that badly affected though?

Source (I know there are non-EU countries but I think this is still valid):

https://www.statista.com/statistics/1104837/coronavirus-cases-europe-by-country/

This is going to be a defining moment for the EU one way or the other. I found it incredibly depressing when the northern "frugal four" were lobbying for loans instead of grants. It's exactly that sort of insular thinking that could lead to the eventual sundering of the project.

Chips Lovell · 21-07-2020 11:32am

Melanchthon wrote: »

If it's determined as talked about previously Ireland is going to get screwed by this with one of the lowest amounts received despite being more affected than a lot of European countries.

According to a report in the Irish Times, the "calculation of need" was changed. It has no figure though on how much Ireland will receive:

Ireland had argued for a change to the system of calculating which member states needed most recovery funds. The initial calculation was entirely based on past data, including economic growth and employment figures, meaning Ireland was due for a relatively small amount of €1.9 billion in recovery fund grants due to its strong performance in recent years

The other thing to note about the recovery fund is that it isn't a net contributor/net recipient thing, at least not directly. The €750 billion isn't coming directly from member states, but is instead being borrowed by the Commission. The plan is to repay it using EU-wide levies, such as plastic and carbon taxes. The Digital Tax is also being mooted.

Melanchthon · 21-07-2020 1:03pm

ancapailldorcha wrote: »

Is Ireland that badly affected though?

Source (I know there are non-EU countries but I think this is still valid):

https://www.statista.com/statistics/1104837/coronavirus-cases-europe-by-country/

This is going to be a defining moment for the EU one way or the other. I found it incredibly depressing when the northern "frugal four" were lobbying for loans instead of grants. It's exactly that sort of insular thinking that could lead to the eventual sundering of the project.

That's not population adjusted though so Poland with 40 something thousand cases looks worse than Ireland when in fact it's done much better.

ArmaniJeanss · 21-07-2020 1:56pm

Melanchthon wrote: »

That's not population adjusted though so Poland with 40 something thousand cases looks worse than Ireland when in fact it's done much better.

How do you fairly adjust for population though? I don't think the simple x per M population thing makes complete sense in this case.

e.g., if an earthquake on the Germany/Denmark border destroyed equal amounts of infrastructure on each side, then you'd expect that any rescue package would be 50/50, regardless of the disparity in overall population between the two countries. Or would it?

Harry Palmr · 21-07-2020 2:07pm

Italy 210bn
Spain 140bn
Greece 70bn
France 40bn

Obviously we'll take our share but "meh" to be honest. It'll cover the Covid social welfare payments for a few months.

thegetawaycar · 21-07-2020 2:19pm

ArmaniJeanss wrote: »

How do you fairly adjust for population though? I don't think the simple x per M population thing makes complete sense in this case.

e.g., if an earthquake on the Germany/Denmark border destroyed equal amounts of infrastructure on each side, then you'd expect that any rescue package would be 50/50, regardless of the disparity in overall population between the two countries. Or would it?

Infrastructure isn't measured against people, it will have a monetary value impact where as the virus is on a per person basis so it makes sense to base any relief on a cases per 100,000 basis. I'd say cases over deaths is a better way of evaluating.

moon2 · 21-07-2020 2:27pm

thegetawaycar wrote: »

Infrastructure isn't measured against people, it will have a monetary value impact where as the virus is on a per person basis so it makes sense to base any relief on a cases per 100,000 basis. I'd say cases over deaths is a better way of evaluating.

If the impact is on a per person basis, why would you include all the people who did not contract covid to determine how much a country should receive?

My own opinion is that raw case numbers and also cases per million are both poor metrics to determine how much a country has been affected.

A country of 10 million which shut down and had 3,000 cases is far worse affected economically than a similar country which had 6,000 cases and never shut down

Melanchthon · 21-07-2020 5:20pm

Harry Palmr wrote: »

Italy 210bn
Spain 140bn
Greece 70bn
France 40bn

Obviously we'll take our share but "meh" to be honest. It'll cover the Covid social welfare payments for a few months.

I think it's worse than "meh", talk is that Netherlands, Sweden, Austria, Denmark and Germany are going to get budget rebates even though they aren't doing worse out of the deal than Ireland*,

This is going to be followed by revenue raising in 2023 by recycling, financial and possibly digital revenue raising as well as higher taxes on imports from countries not meeting climate change target, these will negatively Ireland a country that's getting little from the deal and will be of benefit to Germany with its manufacturing and export based economic model even though Germany will be getting a deeper rebate.

* I haven't seen the Irish figure yet though since RTE aren't reporting it I would believe for the minute it's not good as with the way they put a pro-EU slant on things if it was it would be being talked about.

johnnyskeleton · 21-07-2020 10:01pm

ancapailldorcha wrote: »

Is Ireland that badly affected though?

No, but maybe we are trying to build in some goodwill for when we need a post no-deal Brexit bailout!

This is going to be a defining moment for the EU one way or the other. I found it incredibly depressing when the northern "frugal four" were lobbying for loans instead of grants. It's exactly that sort of insular thinking that could lead to the eventual sundering of the project.

Since the grants would have to come from somewhere, my take on it is that there was a risk that money destined for Eastern Europe and other net beneficiaries would be redistributed back towards the centre by the covid grants. Which, in a sense, would benefit Netherlands etc.

But then again who knows? Maybe it was a principled approach, where they don't want the EU to have a sort of federal emergency fund like the US

Chips Lovell · 22-07-2020 8:04am

Melanchthon wrote: »

This is going to be followed by revenue raising in 2023 by recycling, financial and possibly digital revenue raising as well as higher taxes on imports from countries not meeting climate change target, these will negatively Ireland a country that's getting little from the deal and will be of benefit to Germany with its manufacturing and export based economic model even though Germany will be getting a deeper rebate.

I don't know. For me the biggest outcome from the negotiations is the creation of a precedent for mutualised debt. And while the likes of Mark Rutte will insist that this is a one-off, we all know that once you do it once, it smooths the path for a repeat. That and the prospect of pan-European taxes means we're moving a little further down the road to fiscal integration.

I think the Digital Sales Tax will probably be a stretch and I'd say our government will veto it for one. But the environmentally linked taxes could be a runner. And I don't think they will be to the benefit of Germany, which has a bit of a coal burning problem that is going to be difficult to solve since it has an indigenous mining industry located in a politically combustible region.

Melanchthon · 22-07-2020 8:38am

https://www.irishtimes.com/news/politics/ireland-to-get-1-3bn-for-covid-19-response-from-eu-deal-1.4310280

Seems to be even less than what was talked about before and correct me if I am wrong but I thought there was already EU Brexit funding promised so that was a seperate thing.
Seems like a terrible deal for Ireland.

ancapailldorcha · 22-07-2020 9:28am

Mod: Off topic posts (Lisbon treaty and MMT stuff) deleted.

ancapailldorcha · 22-07-2020 9:31am

johnnyskeleton wrote: »

No, but maybe we are trying to build in some goodwill for when we need a post no-deal Brexit bailout!

That makes sense.

johnnyskeleton wrote: »

Since the grants would have to come from somewhere, my take on it is that there was a risk that money destined for Eastern Europe and other net beneficiaries would be redistributed back towards the centre by the covid grants. Which, in a sense, would benefit Netherlands etc.

But then again who knows? Maybe it was a principled approach, where they don't want the EU to have a sort of federal emergency fund like the US

I'm inclined to think that they dislike the idea of spending money on countries that they see as feckless. It's not markedly different from the attitude some people have towards those who claim welfare though of course scepticism about how these pan-EU grants are divided is important so long as it does not descend into mere cynicism.

Melanchthon · 22-07-2020 12:26pm

ancapailldorcha wrote: »

That makes sense.

I'm inclined to think that they dislike the idea of spending money on countries that they see as feckless. It's not markedly different from the attitude some people have towards those who claim welfare though of course scepticism about how these pan-EU grants are divided is important so long as it does not descend into mere cynicism.

Cynicism is the right attitude though, it's only applied to the Eastern European states but Spain is literally giving away more in Coronavirus aid to non-EU countries than Ireland will receive despite Spain apparently being in such a bad way that not striking this deal would have threatened the EU as a whole.

https://www.translatetheweb.com/?ref=TVert&from=&to=en&a=https%3A%2F%2Fm.europapress.es%2Fnacional%2Fnoticia-gobierno-impulsa-plan-cooperacion-1700-millones-ayudar-paises-afectados-coronavirus-20200721160604.html

In short this deal is terrible for Ireland.

Wanderer78 · 22-07-2020 12:28pm

its very concerning that our political system hasnt realised we have the ability to create our own limited supply of funding for some of our needs, causing us to default to external institutions to do so

MrMusician18 · 22-07-2020 12:41pm

johnnyskeleton wrote: »

No, but maybe we are trying to build in some goodwill for when we need a post no-deal Brexit bailout!

Since the grants would have to come from somewhere, my take on it is that there was a risk that money destined for Eastern Europe and other net beneficiaries would be redistributed back towards the centre by the covid grants. Which, in a sense, would benefit Netherlands etc.

But then again who knows? Maybe it was a principled approach, where they don't want the EU to have a sort of federal emergency fund like the US

The 5bn Brexit bailout fund is included in the budget, so it's likely Ireland will receive half of this fund and the rest distributed among the other nations.

On the recovery fund as a whole, I don't actually mind that we will be net contributors to it. It will add €15bn to our national expenditure which will cost us some €375m per year to finance in interest. What is somewhat galling though is that when the big nation's come looking with the paw out a way is found to provide grants, mutialise debt and provide low interest loans. Our reward though was a punitive 6% interest rate when we needed support, remember the clap trap about "moral hazard"?

The Union would do well to remember that solidarity is always expected for everyone, equally. Not just big member states with rising eurosceptic populist movements.

Scuid Mhór · 22-07-2020 12:48pm

Melanchthon wrote: »

Cynicism is the right attitude though, it's only applied to the Eastern European states but Spain is literally giving away more in Coronavirus aid to non-EU countries than Ireland will receive despite Spain apparently being in such a bad way that not striking this deal would have threatened the EU as a whole.

https://www.translatetheweb.com/?ref=TVert&from=&to=en&a=https%3A%2F%2Fm.europapress.es%2Fnacional%2Fnoticia-gobierno-impulsa-plan-cooperacion-1700-millones-ayudar-paises-afectados-coronavirus-20200721160604.html

In short this deal is terrible for Ireland.

Wasn't it estimated that the COVID emergency payments would amount to six billion euro? 1.3 billion euro, to me, sounds like a negligible amount given what Ireland is up against on a per capita basis and the destructive economic impact the virus has had and will continue to have. I am very in favour of the EU, especially as we hurtle towards a multipolar world of international relations, and I am by no means a eurosceptic, but what's the point of ceding some level of sovereignty to a Union to that is clearly edging towards fiscal harmonisation if we just get left by the wayside?

Chips Lovell · 22-07-2020 12:51pm

I think the idea behind the COVID-19 relief fund is not meet all of the costs a state faces in dealing with the crisis, but to defray some of the costs.

Scuid Mhór · 22-07-2020 1:04pm

Chips Lovell wrote: »

I think the idea behind the COVID-19 relief fund is not meet all of the costs a state faces in dealing with the crisis, but to defray some of the costs.

Sure -- but at the same time it would cost a lot less money to help Ireland substantially than it would cost to improve other countries by the same amount, just based on the size of our population and infrastructure. It's not proportionate is what I'm saying.

bossdrum · 22-07-2020 1:37pm

Obese Child wrote: »

SNIP. Serious posts only please.

I'm afraid you've pick it up wrong, you'll be the one writing the cheque.:D

The silence in the media about this is extraordinary. Ireland is being hammered with this deal.

Wanderer78 · 22-07-2020 1:39pm

bossdrum wrote: »

I'm afraid you've pick it up wrong, you'll be the one writing the cheque.:D

The silence in the media about this is extraordinary. Ireland is being hammered with this deal.

my gut is telling me the same

Chips Lovell · 22-07-2020 1:49pm

Scuid Mhór wrote: »

Sure -- but at the same time it would cost a lot less money to help Ireland substantially than it would cost to improve other countries by the same amount, just based on the size of our population and infrastructure. It's not proportionate is what I'm saying.

I'm not sure if I'm following this? Surely helping Ireland more substantially than others because we're a small country is disproportionate rather than proportionate?

MrMusician18 · 22-07-2020 1:57pm

bossdrum wrote: »

I'm afraid you've pick it up wrong, you'll be the one writing the cheque.:D

The silence in the media about this is extraordinary. Ireland is being hammered with this deal.

That's a bit of an exaggeration to be fair. Yeah, it's not a great deal but it's not terrible either. I'm sure Ireland could've pushed harder on some aspects but Ireland would've found itself isolated then, and friendless when it's true strategic interests were threatened. You have to pick your battles.

For such a monumental jump for the EU, there's been very little analysis of any depth in the Irish media however.
There are many articles saying the same thing. Says more about the quality of Irish journalism than any conspiracy imo.

Chips Lovell · 22-07-2020 2:00pm

MrMusician18 wrote: »

For such a monumental jump for the EU, there's been very little analysis of any depth in the Irish media however

Really? I've been reading loads. In the first twelve hours or so, there wasn't much detail available but presumably that's because it takes a bit of time to pick through what I'm sure is a pretty lengthy and complex agreement.

MrMusician18 · 22-07-2020 2:06pm

Chips Lovell wrote: »

Really? I've been reading loads. In the first twelve hours or so, there wasn't much detail available but presumably that's because it takes a bit of time to pick through what I'm sure is a pretty lengthy and complex agreement.

I don't often look at the IT, but today I clocked through. A good few articles yes, but all light on detail.

I don't think it's a conspiracy to conceal a bad deal from the populace, it just reflects how poor Irish journalism is.

4068ac1elhodqr · 22-07-2020 2:18pm

In a nutshell you pay more in, than you get back, is this not the case as reported widely across the media e.g.

IRELAND is poised to become the '5th highest net contributor to the EU' as a result of the coronavirus recovery package and associated budget agreed by the bloc yesterday, an opposition politician has claimed.

Diceicle · 22-07-2020 2:20pm

MrMusician18 wrote: »

That's a bit of an exaggeration to be fair. Yeah, it's not a great deal but it's not terrible either.....

In what sense? - my understanding of the deal is that we are paying €15bn net to the EU. Larger nations with more advanced infrastructure are paying less. Crude a calculation as it is; France is paying less than a third per citizen, Germany half what we're paying.

Seth Brundle · 22-07-2020 2:22pm

Lila Fat Crossbar wrote: »

In a nutshell you pay more in, than you get back, is this not the case as reported widely across the media e.g.

Maybe in terms of direct payments but member states recoup many times their input from trade within the EU.
Were we to leave the EU we'd be broke within a fortnight!

4068ac1elhodqr · 22-07-2020 2:45pm

Seth Brundle wrote: »

Maybe in terms of direct payments but member states recoup many times their input from trade within the EU.
Were we to leave the EU we'd be broke within a fortnight!

Every country in the EU could claim similar (trade) benefits, but fact remains Ire is the 5th highest contributor.

A smaller EU stretching as far as e.g. Latvia, across to Italy (if they remain) and down to Portugal would mean these members would all be better off, and certainly not broke, and might even attract brexitland back in.

Instead, after the EU2, the WB6 are now being lined up to join, each with an average GDP-PP half that of Germany, which will require plenty of additional funding. Turkey had flirted with the ideal of joining also.

In the bigger picture, and with a global tougher stance against the mighty dragon, the US will be looking for much, much closer partnerships, they'll either choose brexitland or the EU to counteract the Chinese.

MrMusician18 · 22-07-2020 3:05pm

Seth Brundle wrote: »

Maybe in terms of direct payments but member states recoup many times their input from trade within the EU.
Were we to leave the EU we'd be broke within a fortnight!

But could such a free trade construct exist without the massive spending programmes? Rather than a central budget, a framework for domestic support within certain limits for the likes of agriculture could be agreed.

I'd argue that it probably could.

Seth Brundle · 22-07-2020 3:07pm

MrMusician18 wrote: »

But could such a free trade construct exist without the massive spending programmes? Rather than a central budget, a framework for domestic support within certain limits for the likes of agriculture could be agreed.

I'd argue that it probably could.

Flip that question: would we be where we are without the support frameworks from the EU?

MrMusician18 · 22-07-2020 3:22pm

Seth Brundle wrote: »

Flip that question: would we be where we are without the support frameworks from the EU?

It's impossible to say really since the policy has been highly consequential for Ireland. Answering that question is like answering what Europe would be like if Germany won the war. Would we be further behind developmentally? Perhaps. But equally we might not be burdened with a huge debt either.

Not that Irish people can complain about the construct - they've said yes to all the EU reforms.

Seth Brundle · 22-07-2020 3:32pm

MrMusician18 wrote: »

It's impossible to say really since the policy has been highly consequential for Ireland. Answering that question is like answering what Europe would be like if Germany won the war. Would we be further behind developmentally? Perhaps.

It is fairly easy to predict: Ireland was a basket case until we joined the EEC.
Once in, we recieved funds that helped us modernise and move from being a crappy agricultural economy to a global services led economy.
Had we not joined, we'd stilll be heavily dependent on the UK selling milk and beef and that's about it.

MrMusician18 wrote: »

But equally we might not be burdened with a huge debt either.

Not that Irish people can complain about the construct - they've said yes to all the EU reforms.

What amount of our debt has been as a result of EU membership?

Chips Lovell · 22-07-2020 3:35pm

MrMusician18 wrote: »

I don't often look at the IT, but today I clocked through. A good few articles yes, but all light on detail.

I don't think it's a conspiracy to conceal a bad deal from the populace, it just reflects how poor Irish journalism is.

I think some of the detail people are looking for isn't available yet. For example, while the FT coverage is better than the Irish Times (which isn't surprising given the level of resources they have) it still doesn't get into the nitty gritty of net contributors/recipients.

Diceicle wrote: »

In what sense? - my understanding of the deal is that we are paying €15bn net to the EU. Larger nations with more advanced infrastructure are paying less. Crude a calculation as it is; France is paying less than a third per citizen, Germany half what we're paying.

Where's that €15 billion figure coming from? The only place I've seen it is on a graphic being shared around the place that originated on Deutsche Welle, but is dated from May.

blanch152 · 22-07-2020 4:36pm

Scuid Mhór wrote: »

Sure -- but at the same time it would cost a lot less money to help Ireland substantially than it would cost to improve other countries by the same amount, just based on the size of our population and infrastructure. It's not proportionate is what I'm saying.

But why should Ireland benefit disproportionately???

Ireland is a rich country now even by European standards.

https://www.citizensinformation.ie/en/social_welfare/irish_social_welfare_system/claiming_a_social_welfare_payment/going_abroad_and_social_welfare_payments.html

We even had to introduce a restriction on foreign holidays for social welfare recipients during the crisis - you wouldn't get a foreign holiday on German or UK welfare benefits. Our employees are better off than the average EU employee, our self-employed are better off, our pensioners are better off than the average EU pensioner, as I point out, even our unemployed are better off than the average EU unemployed person.

We are very lucky. If you are on social welfare on the continent, you are probably living in a cramped flat on the 8th floor of an old badly-maintained apartment block with a weekly payment far less than the Irish one. If you are on the average wage, you pay less income tax than in other EU countries.

MrMusician18 · 22-07-2020 4:50pm

Seth Brundle wrote: »

It is fairly easy to predict: Ireland was a basket case until we joined the EEC.
Once in, we recieved funds that helped us modernise and move from being a crappy agricultural economy to a global services led economy.
Had we not joined, we'd stilll be heavily dependent on the UK selling milk and beef and that's about it.

What amount of our debt has been as a result of EU membership?

I never said we shouldn't have joined. I said that the Union could've been constructed differently. The structural funds surely helped develop the economy, I agree, but Ireland also gave up control of it's EEZ, and some argue that the value of fish extracted by other EU states far exceeds what we've received in funding.

That said the advancement of the Irish economy is much more to do with access to the market rather than infrastructure. A single market doesn't need a budget beyond something small to administer the common rules.

So what does Ireland receive in return for it's net budget contribution? Some sort of ethereal sense of being good Europeans?

Debt, well the 15bn we will need to borrow to pay our agreed contribution to this fund - and that's before we get into an argument about how the bank bailout came to pass.

I've yet to see a justification for why we had to pay 6% for emergency funding while Italy and Spain will get a mixture of cheap loans and grants in their hour of need.

PeadarCo · 22-07-2020 5:12pm

MrMusician18 wrote: »

So what does Ireland receive in return for it's net budget contribution? Some sort of ethereal sense of being good Europeans?
need.

Ireland will get some help when it comes to Brexit.

In a broader scope what do you think one of the big reasons for a large amount of the multinationals we have here. Remember for all the talk about tax there are plenty of places around the world that have 0 corporation tax but don't have the same levels of FDI or employment.

Even native Irish business do you really think companies like Ryanair, Glanbia, Kingspan etc would have become as big without easy access to the European Market. Remember even today with Irelands largest population in around 150 years or so the ROI has only a population of 4.5 million. The combined EU population is 10 times that. Nevermind the benefits of having a say in global regulations through the EU. Look at Brexit where the Ireland had the upper hand on the UK in negotiations probably for the first time ever which was only possible due to continued EU membership.

The issue around fishing is a myth/red herring to pardon the pun. It provides relatively low levels of employment and exports when compared to the modern service economy and high tech manufacturing that is reliant on EU membership. Even in the Brexit talks the biggest issue for the UK fishing industry is that they sell most their fish to the EU.

MrMusician18 · 22-07-2020 5:26pm

PeadarCo wrote: »

Ireland will get some help when it comes to Brexit.

In a broader scope what do you think one of the big reasons for a large amount of the multinationals we have here. Remember for all the talk about tax there are plenty of places around the world that have 0 corporation tax but don't have the same levels of FDI or employment.

Even native Irish business do you really think companies like Ryanair, Glanbia, Kingspan etc would have become as big without easy access to the European Market. Remember even today with Irelands largest population in around 150 years or so the ROI has only a population of 4.5 million. The combined EU population is 10 times that. Nevermind the benefits of having a say in global regulations through the EU. Look at Brexit where the Ireland had the upper hand on the UK in negotiations probably for the first time ever which was only possible due to continued EU membership.

The issue around fishing is a myth/red herring to pardon the pun. It provides relatively low levels of employment and exports when compared to the modern service economy and high tech manufacturing that is reliant on EU membership. Even in the Brexit talks the biggest issue for the UK fishing industry is that they sell most their fish to the EU.

Ireland is a net contributor to the fund ffs! Help with Brexit, we will be paying more into this Brexit fund for the help we'll get back from it.

Ireland wasn't always a services economy - up until the late 90s manufacturing and primary industry were major employers. A decision was made that fishing wouldn't be developed (it could've been) in exchange for entry into CAP. That was the call, for good or ill. I only mention it is that some posters point to the funds we've historically received from Europe but neglect to mention the common contribution to fishing that Irish membership brought the Bloc.

I agree that the single market is good, but a single market doesn't need enormous spending programmes. It needs a rulebook, and a way to enforce the rules - that's it.

So I'll ask again, why are Spain and Italy not being treated the same as Ireland was when it needed assistance?

PeadarCo · 22-07-2020 5:43pm

MrMusician18 wrote: »
Ireland is a net contributor to the fund ffs! Help with Brexit, we will be paying more into this Brexit fund for the help we'll get back from it.

Ireland wasn't always a services economy - up until the late 90s manufacturing and primary industry were major employers. A decision was made that fishing wouldn't be developed (it could've been) in exchange for entry into CAP. That was the call, for good or ill. I only mention it is that some posters point to the funds we've historically received from Europe but neglect to mention the common contribution to fishing that Irish membership brought the Bloc.

I agree that the single market is good, but a single market doesn't need enormous spending programmes. It needs a rulebook, and a way to enforce the rules - that's it.

So I'll ask again, why are Spain and Italy not being treated the same as Ireland was when it needed assistance?

So what your saying is the EU bail out of Ireland wasn't assistance? Remember Ireland was bust unable to borrow because of rates normal lenders were charging Ireland. Ireland got loans at below market rates that have since been negotiated to even lower amounts. Certain amounts have been given such long maturity dates to make the cost/valueof the loans close to irrelevant ie free money. So basically complaining that Ireland didn't have enough austerity and that the Banks should be let go bust with all the associated costs associated with far more businesses going bust and people being made homeless. Without the EU the 20 billion hole in Irish finances would have to have been closed immediately not over a number of years. Actually the hole would have been even higher with no functioning banking system. That's what would have happened if other EU states didn't put their hands in their pockets at the time. Remember most of those other EU countries were and are poorer than Ireland.

The bank guarantee was an Irish decision that annoyed the hell out of other EU states when first announced. So the EU can't be blamed for that.

You are aware Ireland is one of richest countries in the world never mind EU so it's normal to expect Ireland to be a net contributer. If you want to look at what Ireland gets back look at Brexit and remember the UK is a far far larger economy than can take the hit better.

In terms of the cost of the EU again look at Brexit and the cost of duplicating every EU regulatory body and the costs associated with increased customs controls. The EU relative to its GDP has very low costs.

What is the told value of fishing Ireland gave up?

Dytalus · 22-07-2020 5:46pm

MrMusician18 wrote: »
Ireland is a net contributor to the fund ffs! Help with Brexit, we will be paying more into this Brexit fund for the help we'll get back from it.

Ireland wasn't always a services economy - up until the late 90s manufacturing and primary industry were major employers. A decision was made that fishing wouldn't be developed (it could've been) in exchange for entry into CAP. That was the call, for good or ill. I only mention it is that some posters point to the funds we've historically received from Europe but neglect to mention the common contribution to fishing that Irish membership brought the Bloc.

I agree that the single market is good, but a single market doesn't need enormous spending programmes. It needs a rulebook, and a way to enforce the rules - that's it.

So I'll ask again, why are Spain and Italy not being treated the same as Ireland was when it needed assistance?

Where on Earth has this "Ireland is a net contributor to the COVID Fund" come from? It's frickin' everywhere.

IT IS NOT TRUE.

None of the Member States are 'contributing' to the €750 billion COVID recovery fund. The EU Commission will be issuing bonds on the market to raise the money, and then the goal to pay for those bonds down the line is through a number of "Own Resources" - like a new plastic tax or carbon tax which (like tariffs and VAT currently are) will be collected by member states on behalf of the EU. None of the Member States are inputting anything into the fund at this point.

What Ireland is contributing to is the regular EU budget - the Multiannual Financial Framework (MFF). Ireland has been a net recipient of EU funds right up until the most recent MFF cycle (look at the 2nd point under Economy and Jobs) which lasts 7 years, the current one from 2014-2020. The next will begin in 2021. It's decided based on Gross National Income - Ireland is a very wealthy country in this regard. Quite above the EU average, and so as a result we will be contributing more per citizen than some other EU nations. Our money will go into the development of less-developed EU nations in exactly the same way Germany, France, Italy and others have been net contributors that funded our development for decades

We're rich now, we should pay our share. A more developed EU is better for us down the line because we are an enormously globalised economy and are enormously reliant on the Single Market for our wealth.

Chips Lovell · 22-07-2020 6:12pm

MrMusician18 wrote: »

So I'll ask again, why are Spain and Italy not being treated the same as Ireland was when it needed assistance?

For a start, a banking crisis and a pandemic aren't the same thing. One is a man made disaster, the other more a natural disaster. Given how difficult it was to secure the COVID deal, I don't think it's in anyway a foregone conclusion that mutualised debt would have be used to aid with a banking collapse in those countries.

Secondly, it ought to be possible for the EU to learn from the mistakes of the past. Mutualised debt was floated as a possibility at the time of the banking crisis and there was even more resistance to it then than there is now. If you believe the EU made a mistake in not taking this path back then, why do you think it should repeat that mistake now?

Chips Lovell · 22-07-2020 6:28pm

Regarding our contributions, they're calculated on the basis of GNI. I don't know what the final figure was, but the Commission was proposing 0.9 percent of GNI by 2027.

Our GNI last year was €275 billion, so a back of an envelope estimate of our gross contribution would be around €2.5 billion a year. I must stress that's a very rough calculation and we won't know the correct figure until a more detailed breakdown of the budget comes out.

Our net contribution would be calculated by deducting everything we get back from the EU every year.

MrMusician18 · 22-07-2020 7:09pm

Dytalus wrote: »

Where on Earth has this "Ireland is a net contributor to the COVID Fund" come from? It's frickin' everywhere.

IT IS NOT TRUE.

None of the Member States are 'contributing' to the €750 billion COVID recovery fund. The EU Commission will be issuing bonds on the market to raise the money, and then the goal to pay for those bonds down the line is through a number of "Own Resources" - like a new plastic tax or carbon tax which (like tariffs and VAT currently are) will be collected by member states on behalf of the EU. None of the Member States are inputting anything into the fund at this point.

What Ireland is contributing to is the regular EU budget - the Multiannual Financial Framework (MFF). Ireland has been a net recipient of EU funds right up until the most recent MFF cycle (look at the 2nd point under Economy and Jobs) which lasts 7 years, the current one from 2014-2020. The next will begin in 2021. It's decided based on Gross National Income - Ireland is a very wealthy country in this regard. Quite above the EU average, and so as a result we will be contributing more per citizen than some other EU nations. Our money will go into the development of less-developed EU nations in exactly the same way Germany, France, Italy and others have been net contributors that funded our development for decades

We're rich now, we should pay our share. A more developed EU is better for us down the line because we are an enormously globalised economy and are enormously reliant on the Single Market for our wealth.

Ah, so we are paying for that ethereal sense of European-ness. And indeed paying grant aid towards other wealthy European nation's, last time I checked, Spain and Italy had high GDPs too. Why aren't we charging them 6%? You know the kind of solidarity we received...

While the EU may be imposing common taxes to fund this bailout, these have not been agreed and the liability for these borrowings will fall proportionally on the member states so Ireland's balance sheet will have to reflect this. It can't be hand waived away like you are claiming. And if they can't agree on these taxes it will be paid for though direct budget contributions. Either way, Irish taxpayers will be putting in a lot more than they will be getting out.

I agree we are enormously reliant on the single market for our wealth and I'm no eurosceptic. What is more than irritating is that it's only because populist movements that threaten the place of Spain and Italy in the Union are gaining in strength is what is motivating the bailout. When Ireland needed financial assistance at came at a price of 6%, when Greece needed assistance dealing with migrants, the European back was turned.

Solidarity for some, threats of financial bombs and 6% for the rest of us.

johnnyskeleton · 22-07-2020 7:21pm

MrMusician18 wrote: »

But could such a free trade construct exist without the massive spending programmes? Rather than a central budget, a framework for domestic support within certain limits for the likes of agriculture could be agreed.

I'd argue that it probably could.

I don't accept that they are massive spending programmes when they constitute 1% of member states GDP.

To answer your question, yes, a free trade organisation could exist for less money, but it wouldn't be able to integrate the economies as finely as the EU does, nor would it be able to uphold the values of the EU, including the redistribution of wealth to underdeveloped regions, ensuring a strong agricultural sector, etc.

Domestic support within limits for agriculture would result in a more unstable food economy and would overall be bad for farmers, as we are seeing with the UK, but to give you an answer more in keeping with your question, under the principle of subsidiarity, local governments do get to decide how the CAP payments are distributed within certain parameters, so it wouldn't really make much difference. The member states can agree to change those parameters every few years, and often do.

Deal! EU reaches agreement on budget and COVID-19 stimulus fund

Comments