EU enlargement ‘will cost Ireland dearly'

Goodbody Stockbrokers have predicted that Ireland’s public finances will deteriorate sharply when the country becomes a net contributor to the European Union over the next four years.

A report compiled by the company said the days of budget surpluses would be consigned to history once Ireland began to contribute to EU funds rather than benefit from them.

The report, based on the impact of EU enlargement next year, said Ireland would become a net contributor by 2007 and politicians must realise that economic recovery on its own will not be enough to offset this development.

Goodbody said the public finances in Ireland would come under severe strain when EU hand-outs in areas such as agriculture dried up and when Ireland is expected to provide around €1bn every year into EU funds.

Fine Gael MEP Joe McCartin later dismissed the report as premature, saying it was impossible to make long-term predictions in an evolving political situation.