Would EU Budget postponement be a least-worst option?

While certainty is what we might prefer, if that certainty involves financial loss, then postponement and procrastination are better options. It is increasingly likely that agreement on reform of the next Common Agricultural Policy (CAP) will be kicked down the road for 12 months. There is currently a lack of agreement on an increase, if any, in the funding of the next CAP and Multiannual Financial Framework (MFF). With several EU Member States unwilling to fund a larger CAP budget, there is little prospect of agreement being secured in the short term. Under current budgetary proposals, EU farmers are facing significant reductions in payments over the next seven years. Losses to Irish farmers could amount to €2.4bn or an almost 25 per cent reduction between 2028 and 2034. If agreement is not reached before the Irish presidency of the European Council ends in December, there is no likelihood of any agreement being finalised in the following months. There are critical national elections across the EU in 2027 and any political party in Italy, France or Spain that promotes either higher taxes or lower CAP payments will incur the wrath of some or other critical elements of their electorate. Postponement of EU financial spending decisions may be preferable to losing votes. Unfortunately, postponement brings risks. If the Far right takes the French presidency, then a quite antagonistic approach to the European Union may emerge in French foreign policymaking. Likewise, Italy could opt for a more sceptical post-election EU policy. Spain is another critically important EU Member State, and a change of Government there next year could herald a significantly different set of priorities, with potential implications for EU policy generally and, especially, funding priorities. While Germany is more than two years from a national election, the recent State elections suggest a lurch to the right, with significant implications for the EU if it is ultimately reflected in any future German Government composition. Even in the short term, German government policies across defence, migration, Russia/Ukraine and funding the EU Budget will be shaped by a necessity to counteract the rise of the Right among its electorate.
All of this feels far from home. The reality, however, is that political developments across the EU impact Ireland and Irish policies. Our politicians are acutely aware of the need to appease sectoral interests. Farmers are one such cohort. Fuel-price protesters are another, as we saw earlier in the year and may see again before the year is out. This month’s budget is an exercise in appeasement as much as it is a responsible effort to manage the country’s finances. Initiatives such as the development of investment fund options for savers are mere distractions to the real issues facing our economy. The need for vastly increased investment across energy infrastructure and resilience is just one example of where our policy focus should be. Our defence spending is entirely inadequate for protecting our national interests as a sovereign and neutral country.

As an addendum on Government spending priorities, we embark on an enormously costly underground transport system without a clear, up-to-date cost/benefit analysis. Six years ago, the Systra report calculated the financial benefit of building the then €4bn Metrolink at between 2.41 and 3.02. That’s a return of €9.64bn over the long term. The Metro is now estimated to cost a minimum of €17bn. Is there an updated cost/benefit analysis to confirm that figure still allies to a 2.41 benefit? Building a Metro simply because everyone else has one is a poor rationale. We need a Metro if it can deliver a worthwhile financial return for passengers, social activity and economic development.