Structural and Regional Funding from the EU

The aim of economic and social cohesion was implicitly an objective of the EEC after 1957 but only became really significant after successive enlargements rendered the Community significantly less homogeneous. The Delors Package of 1988 constituted an enormous step forward, in vastly expanding the existing redistributive arrangements, and Ireland – as a so-called ‘Objective One’ country – became the recipient of very large amounts of aid as the enlarged funding programme became operational. The Maaastricht Treaty went further again, in introducing the Cohesion Fund, which provided financial assistance to poorer member states, whose Gross National Product (GNP) per capita was less than 90 per cent of the overall EU average. Over the next quarter century years Irish economic fortunes were turned around very significantly and structural funds played an unprecedented role in supporting economic development: the scale of the financial transfers from Brussels was simply unprecedented. There was a doubling of resources in the EU budget for the Structural Funds between 1988 and 1992, and a doubling of the transfers to the cohesion states (the poorer members which qualified for Structural and Cohesion Funding), including Ireland, by 1993. Thereafter structural funds accounted for a very substantial share of Irish GNP as economic takeoff accelerated. Between 1989 and 1999, regional aid to Ireland amounted to approximately 3 per cent of GNP per annum; in some years the receipts amounted to in excess of 5 per cent of GNP.

The sheer scale of the funding received effectively delivered a ‘mini-Marshall Plan’ to Ireland, precisely at a time when the Dublin government was being forced to cut capital spending as an imperative in tacking the protracted debt crisis inherited from the fiscally irresponsible spending years in the 1980s. This subvention was employed to resource and transform a relatively under-developed physical infrastructure (Prof Ed Walsh, the then president of the University of Limerick famously remarked that Ireland had a ‘Silicon Valley economy married to a Sicilian infrastructure’) which compared badly to that of Ireland’s advanced EU trading partners. Thus large sums were poured into developing Ireland’s nascent motorway network, as well as the rail and port infrastructure and hitherto neglected environmental programmes. In addition structural funding contributed significantly to transforming Irish patterns of training and research, and enhanced the depth and scale of regional industrial, social and community development programmes. Comparison with aid distributed to the other cohesion states (Greece, Portugal and Spain) suggests that the money was relatively well targeted in Ireland, in particular - through the European Social Fund - in re-training workers who had been made unemployed in the harsh economic landscape of the late 1980s. Irish negotiators proved highly capable in arguing their case during successive EU budget negotiations. Amongst the standout infrastructural programmes supported by EU funding in this period were:  the redevelopment of seaports in Cork, Killybegs and Rosslare to accommodate larger boats with larger loads; improving public transport with Intercity trains, construction of the Boyne Bridge, and the extension of the Dart line and Luas. Ireland paid €1.73billion towards the EU budget in 2013 but was still a net recipient of funds within the EU budget when monies from the CAP and structural funds are taken into account.