THE GOVERNMENT has welcomed a proposal by the European Commission to provide €100 million to help build an electricity interconnector between Ireland and Britain.
The funding is part of a €5 billion EU stimulus package, which proposes giving Ireland tens of millions for wind power, broadband and rural development projects.
“We need to learn the lessons of the recent gas crisis and invest heavily in energy. We also need to stimulate the European economy by providing information highways in rural communities,” said commission president José Manuel Barroso, who wants all 27 EU leaders and MEPs to sign off on the list of projects in the package within a few months.
The commission wants to finance the stimulus package by utilising unused cash from the EU budget. It provides a detailed breakdown of €3.5 billion in energy projects, which the commission wants to fast track to give the economy a boost and improve energy security. It proposes spending: €1.75 billion on new cross-border gas and electricity interconnectors; €500 million on offshore wind power; and €1.25 billion on carbon capture and storage projects to trap CO2 underground to combat climate change.
The Government has been allocated €100 million to help build an electricity interconnector between north Dublin and Wales and additional funding to help develop offshore wind projects. Some €150 million would be shared between Britain, the Netherlands, Germany, Ireland and Denmark for this project under the proposal.
Energy Minister Eamon Ryan said the interconnector would benefit consumers in the long run by placing downward pressure on prices and increasing competition in the electricity sector. It would also boost Ireland and Europe’s energy security, he said.
The Government also stands to benefit significantly from a €1.5 billion tranche of cash proposed for rural broadband projects and to meet challenges faced by farmers and rural communities such as climate change, biodiversity and dairy restructuring. The commission is proposing to disburse this cash under its existing rural development funding mechanism, which is generous to Ireland when compared with other states.
One EU source said Ireland received more than 4 per cent of all rural development funds under the existing formula. This means the Government could secure up to €60 million in EU funds if it can identify viable projects and submit watertight applications.
But it is not yet certain that the commission package will be supported by all EU states. Several countries such as the Netherlands and Germany have said they are unhappy about utilising unused EU funds to finance the package and may try to block it at the council of ministers in coming weeks. Both states are net contributors to the EU budget and would prefer the €5 billion of unused EU money to be returned to them rather than used to finance projects, which one diplomat argued “didn’t make economic sense”.
Ireland continues to be a net beneficiary from the EU budget and any unused cash that it can secure under the package represents a boost for the Irish economy.
