EU talks crucial to Irish recovery
by Niall Shanahan
 
Ireland currently ranks ninth among EU member states in terms of the number of workers temporarily unemployed, with a figure of 600,000.
Ireland currently ranks ninth among EU member states in terms of the number of workers temporarily unemployed, with a figure of 600,000.

Last Friday’s meeting of the European Council in Brussels fell short of ironing out disagreements over the proposed EU recovery package, designed to restore European economies severely damaged by the effects of the coronavirus pandemic.

 

The role of the European Council, made up of the Taoiseach and his EU counterparts, is to define the EU's overall political direction and priorities. While it’s not a legislative body, it has a major influence on EU economic and social policy.

 

The meeting was called to seek agreement on a €750bn recovery plan proposed by the European Commission. Ireland is currently due to receive €3 billion from the fund, but will push for more.

 

The country’s recent economic performance means it will almost certainly be a net contributor during the EU’s next seven-year budgetary period.

 

The amount designated to Ireland from the recovery fund is also based on its recent impressive economic performance. The Irish Government is arguing that this doesn’t accurately reflect the impact of the virus on the Irish economy.

 

Millions unemployed

Meanwhile, the European Trade Union Congress (ETUC) has told EU leaders they have a responsibility to save as many as possible of the 42 million European jobs that have been lost as a result of coronavirus.

 

As well as boosting employment, European Commission figures show that extra EU investment would ensure real wages are higher than they would otherwise be in the coming decade. 

 

Without it, the Commission expects household incomes to suffer due to temporary cuts in earnings and permanent job losses, which could drive the EU unemployment rate up to around 9% this year, undoing three years’ of job market improvements.

 

Ireland currently ranks ninth among EU member states in terms of the number of workers temporarily unemployed, with a figure of 600,000. This is just over a third of all workers in the state.

 

Resistance

The so-called ‘frugal four’ EU states – Austria, Denmark, Sweden and the Netherlands – are resisting important elements of the recovery plan. They object to the formula for allocating funds, which is based on unemployment numbers that predate the current crisis.

 

Dutch Prime Minister Mark Rutte has said countries that receive EU funds should increase their tax take and impost austerity-style ‘reforms’.

 

In a Fórsa blog published last month, the union’s general secretary Kevin Callinan said the majority of EU countries were moving towards a different model based on an ambitious recovery fund, investment in a green and digital transition, European health sovereignty, and enhanced economic and industrial resilience.

 

“The EU recovery plan will be linked to Europe’s multi-annual financial framework, which will set the Union’s budget between 2021 and 2027. There are some downsides for Ireland, which will become a net contributor to the EU’s budget, while corporate tax consolidation will remain on the agenda.

 

“But these difficulties were coming regardless of the pandemic. Unlike in 2008-2013, recent developments hold out hope of EU-level support to help Ireland address its infrastructure and labour market challenges,” he said.

 

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