'Leprechaun economics' will cost us €280m
Ireland will have to contribute an additional €280m to the EU budget due to our heavily-distorted growth figures, Finance Minister Michael Noonan confirmed.
The Central Statistics Office (CSO) revealed last week that the Irish economy grew by a massive 26.3pc in 2015 - more than three times the original estimate.
Experts dismissed the massive revision as "Leprechaun economics" and a "farce" as it relates to the activities of Ireland's complex multi-national sector.
Even Finance Minister Michael Noonan said October's Budget would be based on growth of around 5pc, as the revised figure provoked a bemused international reaction.
But as the figure pushes up the value of the Irish economy, at least on paper, then the amount of money we must contribute to the EU Budget also rises.
EU contributions are significantly determined by a country's GDP.
Mr Noonan said the increase is around €380m, but added that "mitigating factors" meant it would actually be around €280m higher than what had been previously estimated.
"We currently estimate the impact of the Central Statistics Office revision on our EU Budget contribution for 2017 at about €380m," Mr Noonan said, in response to a parliamentary question from Fianna Fail.
"However, other mitigating factors mean the overall increase in the EU budget contribution is now estimated to be in the order of €280m, when compared with the forecast underlying the Summer Economic Statement.
"It must be emphasised that the final impact depends on a number of variables, including the size of the overall EU budget for 2017 (which is not due to be agreed until November 2016) ... and other EU budget developments."
The colossal increase in GDP was due in part to some very large foreign companies reinventing themselves as Irish companies to benefit from our low corporation tax rate. Large purchases by aircraft-leasing firms based here were also a factor.
The Department of Finance said the increased contribution to the EU will not impact on the 'fiscal space' available - around €1bn for the 2017 Budget.
But Fianna Fail finance spokesman Michael McGrath said the GDP figure had "lumped us with a bill of €280m" and greater engagement with Eurostat is now needed. Speaking to RTE, he asked what impact it will have on the Department of Finance.
"My understanding is that they are going to have to engage now with the EU commission, for example, to see if it will have any impact, so it's not absolutely certain," McGrath said.