Ireland can afford extra EU payment says finance minister Noonan
THE Republic’s finance minister Michael Noonan has said Ireland can afford the extra €280m EU payment it has been hit with after the upward revision of the Republic’s GDP growth for last year.
His remarks follow figures from the Central Statistics Office indicating GDP growth for 2015 to 26 percent from a previous estimate of 7.8 percent.
The growth figures, widely considered to be distorted, were described as ‘leprechaun economics’ by Nobel Prize winning economist Paul Krugman, as they do not reflect reality.
Nevertheless, as the CSO revised the Republic’s GDP growth, a bigger contribution is demanded from the EU.
The CSO used standard international rules for drawing up accounts.
But the structure of Ireland’s small, open economy around tax, finance and treasury means money has flown through the Republic but not added much to the economy in real terms.
Michael Noonan said the CSO figures were a surprise to him but that Ireland will be able to meet the increase in its contribution to the EU budget as it has collected more euro in taxes than had been expected.
The minister told RTÉ that after the abolition of the ‘double Irish’ tax, a number of international corporations brought their intellectual property onshore in Ireland, resulting higher profits accruing to the balance sheets of companies based in Ireland, which resulted in more corporation tax.
Mr Noonan also said the advice from the CSO is that another “great leap forward” is not expected.
Ireland’s contribution to the EU will have to be revised again when the UK fully withdraws from the EU.