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The European Commission is to award nearly €1 billion to Ireland to fund green and digital investments and stimulate economic growth over the next 18 months.
The €915 million will be Ireland’s first share of the EU’s agreement to share €750 billion in grants and loans to member states to counteract the effect of the Covid-19 pandemic.
The president of the European Commission, Ursula von der Leyen, will officially mark the approval of the Covid-19 stimulus and reform plan when she visits Dublin on Friday morning.
During her visit Ms von der Leyen she will meet Taoiseach Micheál Martin, before visiting tech projects at Technical University Dublin that are slated to receive funds.
The visit is “to personally hand over the commission’s assessment of the national recovery and resilience plan” , a spokesman for the executive told The Irish Times.
The Government submitted its plan on how it would spend the funds in May, outlining a mix of investments and reforms to make the economy more green, improve digital infrastructure and boost economic growth.
The proposals complement the Government’s Economic Recovery Plan and National Development Plan, and are expected to involve initiatives to cut Ireland’s carbon emissions and help people re-enter the workforce following what the Government has called the “scarring impacts of the pandemic”.
The approval of the plan follows weeks of negotiations with the commission to ensure that it is in line with the rules of the stimulus plan, which require 37 per cent of the funds to be spent on investments and reforms that help achieve climate objectives, and a minimum of 20 per cent on digitalisation.
A final sign-off is required by a meeting of EU finance ministers set for July 26th, after which 13 per cent of the funds or roughly €123.5 million in pre-financing should be available to be issued to Ireland within about two months.
Final approval
Earlier this week the funding plans of 12 member states, including France, Germany, Italy and Spain, received their final approval. Approval of Hungary’s plan has been delayed by concerns about insufficient safeguards against corrupt use of funds.
Countries with underlying structural economic difficulties and which were hit hardest by the pandemic due to large tourism sectors are set to receive large amounts of funding. Italy is set to receive €68.9 billion in grants, Spain €69.5 billion, Greece €17.8 billion and Portugal €13.9 billion.
Ireland is expected to receive a second smaller chunk of funds in addition to its €915 million in 2023, but overall will receive among the smallest allocations in the EU.
This is because level of funding is based on prior economic growth and the impact of the pandemic, and Ireland’s economy had been growing strongly and was the only one among the 27 to grow last year, supported by multinational exports.
The money is being jointly borrowed by EU member states, and Ireland expects to be a net payer to the initiative. However, the Government has said the national economy could not thrive without growth in the single market overall and that it was vital to support struggling member states to ensure recovery.