Michael Noonan: Country can afford to pay EU extra €280m

Finance Minister Michael Noonan has said that the country can afford to pay the EU an additional €280m, after the CSO said economic growth had soared by over 26% last year.

He said that despite the additional charge to the State, there is no change in the budget position and there will be no impact on services.

Speaking yesterday, Mr Noonan said Ireland will be able to meet the increase in its contribution to the EU budget because it has collected more money in taxes this year than expected.

However, Mr Noonan said the CSO figures were a surprise to him, adding the figures came out of the blue and that he did not have advance notice.

Explaining the spike in the GDP growth, Mr Noonan said that following the abolition of the ‘double Irish’ tax, some international corporations brought their intellectual property onshore in Ireland.

This led to bigger than expected profits showing up on the balance sheets of Irish-based companies, which in turn resulted in more corporation tax, Mr Noonan said.

The matter also was raised during Leaders’ Questions in the Dáil.

Tánaiste Frances Fitzgerald was pressed on the need for Ireland to pay the EU an additional €280m.

Fianna Fáil’s Robert Troy said the findings made an international “mockery of Ireland” and called on the Government to ensure such anomalies do not occur again.

In response, Ms Fitzgerald reminded Mr Troy that the CSO is an independent body and not under the control of Government.

She said that more work is needed to clarify why the spike in the numbers occurred and insisted that the process of deciding how much Ireland will eventually pay is not yet concluded.

Meanwhile, one of Ireland’s most senior financial officials has confirmed international investors have contacted this country due to widespread concern and disbelief at last week’s claimed 26.3% GDP growth.

The National Treasury Management Agency chief executive Conor O’Kelly said companies have been in contact, adding: “If you’re explaining, you’re losing. And a lot of explaining has been done.”

Mr O’Kelly described the alleged growth rate as “distorted”.

He said that investors are now using other economic indicators because the 26.3% economic growth figure cannot be believed.