Influences of The Eu on The Irish Economy

• EU membership has had a huge impact on the Irish economy since 1973. While there have been some negative impacts, the Irish economy has had positive changes.
• The neo-colonial link with Britain has been broken. Ireland has become economically independent, meaning that Ireland no longer relies on Britain for the majority of its imports and exports.
• Access to the EU market has attracted huge amounts of foreign direct investments from MNCs into the Irish economy.
• The huge transfer of funds from the EU to Ireland (more than €45 billion between 1973 and 2001) has raised Ireland’s GNP by 4% and brought huge improvements to the infrastructure.
• EU laws and regulations have improved safety, environments etc in Ireland.
• Ireland has lost control of some of its natural resources, such as fish stocks and many small manufacturing industries have collapsed due to the removal of tariffs and quotas in the free-trade markets, such as textiles and food processing.
• The major EU influences on the Irish economy include the Common Agricultural Policy and transfer of funds, e.g. Structural Funds and Cohesion Funds.

The Common Agricultural Policy (CAP) and its Effect on Ireland

• The CAP was set up in 1962 by the EU to provide a decent standard of living for farmers and to increase food production.
• This was achieved by subsiding produce/exports from the EU and increasing tariffs on imported agricultural products.
• The Guarantee Fund, which buys and surplus products which are unsold, means that producers are guaranteed a certain price for their produce.
• The Guidance Fund gives grants for larger farms and machinery. This encourages better productivity.
• The CAP costs upwards of 40% of the total EU budget, which is a major cost. There has also been overproduction caused by the Guarantee Fund.
• In the early 1990s, price support was reduced, as well as direct income support to small-scale farmers.
• In 1973 (the year that Ireland joined the EU), agricultural production was of great importance to the Irish economy. It was responsible for 45% of the value of exports, 25% of employment and 47% of Irish people lived in rural areas.
• The CAP gave Irish farmers access to a huge and rich market. They were also guaranteed higher prices.
• Farmers in Ireland were provided with huge amounts of money to modernise farming. There was a reduced dependency on the British low-priced food policy.
• Between 1973 and 1998, the EU transferred approximately €37 billion to Ireland. €25 billion of these funds were used for Irish agriculture.