A central item on the agenda for tomorrow and Friday is the next multi-annual financial framework, MFF, for 2021 to 2027, which was published in May. This next budget for the European Union comes at a period of great change and massive challenges posed by major migration into the Union, climate change, to which my colleagues have alluded, and coping with Brexit in Ireland’s case. We are all hoping that tomorrow’s election in the UK will yield a result that will not keep us in the intolerable Brexit struggle and that, towards the end of 2020, we will not be facing another cliff edge.
As the Minister of State knows, Ireland’s net contributions to the European budget have been steadily increasing and we have been a net contributor for the past six years. We must be careful that our budget contributions do not replace national debt interest as a considerable burden on our national budget, year in and year out. The UK will contribute to the EU budget until at least the end of 2020, depending on tomorrow’s result.
A few weeks ago, the Minister for State forecast that our budget contributions would rise to just under €3 billion in 2020, €3.2 billion until 2022 and up to approximately €3.5 billion by 2023. Of course, these projections are based on a number of contingencies, including the performance of our own gross national income, GNI, and whatever budget is agreed at meetings such as the one happening today.
More important than keeping a close eye on the overall budget for the Taoiseach and our Ministers is the necessity to make changes and amendments to the fiscal rules in the Stability and Growth Pact. This framework of budgetary discipline has evolved significantly over the past 20 years but we know from meetings of the finance and budgetary oversight committees and so on that there are elements to the fiscal rules that are almost like a straitjacket for our country and which need to be amended and changed. The five-year review of the six pack and two pack rules that are part of the fiscal rules was due to be published by the end of the year and I wonder whether we have got our hands on that yet to be able to see what is being proposed. Have the Taoiseach and the Minister for Finance made submissions to the review on behalf of Ireland? There are many elements of the Stability and Growth Pact which do not suit our economy and budgetary strategy. We need those amended and to wriggle out of the straitjacket. The Germans have been apologising to us for the suffering we underwent in the austerity years but in actual fact, the overall system that they have implemented on budgetary rules is not appropriate for our country.
We also have the European Fiscal Board’s assessment of the fiscal rules, which were discussed at the September meeting of ECOFIN. The Taoiseach and the Minister for Finance should be clearly articulating Ireland’s dissatisfaction with the way the fiscal rules have operated and making proposals for reform.
We earlier learned that members of the eurozone were being asked to devise a budget for the eurozone, which will also have a major impact. That was to be a part of the overall MFF and there is talk about a budgetary instrument for competitiveness and convergence, contributions on which are open to all members, and candidate members, of the eurozone. Will this be something that will come up at the Council meeting today and tomorrow in the context of negotiations for the MFF? It was reported that the general principles underpinning this budgetary instrument had been agreed but it will have a major impact on our budgetary strategy. It is something else about which the Taoiseach needs to report to us.
The other element on the financial side of the Council agenda is technical work on strengthening the banking union. It must be said, as Ms Christine Lagarde takes over as President of the European Central Bank, ECB, that it has failed to achieve appropriate goals, particularly in respect of employment, growth and inflation, and giving the necessary stimulus to the European economy in 2019 and from 2020 onwards.
The ECB is not accountable directly to the Council but it is accountable to the European Parliament and to this House. It is an area the Taoiseach should be raising. He should be asking for a more dynamic European Central Bank to help our economy and those of the other 27 member states, or 26, as may be shortly the case.