ECONOMIC, SOCIAL AND TERRITORIAL SITUATION OF IRELAND

DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT B: STRUCTURAL AND COHESION POLICIES REGIONAL DEVELOPMENT ECONOMIC, SOCIAL AND TERRITORIAL SITUATION OF IRELAND IN-DEPTH ANALYSIS for the REGI Committee

This document was requested by the European Parliament's Committee on Regional Development. AUTHOR Marek KOŁODZIEJSKI Policy Department B: Structural and Cohesion Policies European Parliament B-1047 Brussels E-mail: poldep-cohesion@europarl.europa.eu EDITORIAL ASSISTANCE Virginija KELMELYTE LINGUISTIC VERSIONS Original: EN ABOUT THE PUBLISHER To contact the Policy Department or to subscribe to its monthly newsletter please write to: poldep-cohesion@europarl.europa.eu Manuscript completed in March 2014. European Union, 2014. This document is available on the Internet at: www.europarl.europa.eu/studies DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorized, provided the source is acknowledged and the publisher is given prior notice and sent a copy.

DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT B: STRUCTURAL AND COHESION POLICIES REGIONAL DEVELOPMENT ECONOMIC, SOCIAL AND TERRITORIAL SITUATION OF IRELAND IN-DEPTH ANALYSIS for the REGI Committee Abstract This analysis provides an overview of Ireland's economic, political and administrative framework for EU Cohesion Policy, as well as its National Strategic Reference Framework for the 2007-2013 period. The paper also gives an insight into Ireland's preparations for the implementation of the new Cohesion Policy for the 2014-2020 period. The analysis has been prepared in the context of the Committee on Regional Development's delegation to Ireland in March 2014. IP/B/REGI/NT/2014_01 March 2014 PE 529.045 EN

Economic, social and territorial situation of Ireland TABLE OF CONTENTS LIST OF ABBREVIATIONS 5 LIST OF FIGURES 7 LIST OF TABLES 7 1. KEY FACTS AND FIGURES 9 1.1. Political and governmental structures 10 1.2. Economy 11 1.3. Population 13 2. INSTITUTIONAL AND ADMINISTRATIVE FRAMEWORK FOR EU COHESION POLICY 15 2.1. Current administrative division of Ireland 15 2.2. Local Government Reform of 2014 17 2.3. Structural Funds management 18 3. EU COHESION POLICY IN IRELAND 2007-2013 19 3.1. Objectives and funds 19 3.2. NSRF and Operational Programmes 20 3.4. OP 'Southern and Eastern' 22 3.5. OP 'Border, Midland and Western' 23 3.6. European Territorial Cooperation 24 3.7. OP Peace and Reconciliation - PEACE Programme 24 3.8. Implementation of Cohesion Policy - examples of projects 26 4. EU COHESION POLICY IN IRELAND 2014-2020 29 4.1. Partnership Agreement 29 4.2. Budget 29 4.3. European Territorial Cooperation 30 4.4. Urban policy 31 SUMMARY 33 REFERENCES 35 3

Policy Department B: Structural and Cohesion Policies 4

Economic, social and territorial situation of Ireland LIST OF ABBREVIATIONS BMW DG REGIO Border, Midland and Western region Directorate-General for Regional Policy, European Commission ERDF European Regional Development Fund ESF EUR ICT IT LAU MFF European Social Fund Euro Information and Communication Technology Information Technology Local Administrative Unit Multiannual Financial Framework NMS New Member State NSRF National Strategic Reference Framework NUTS OP PPS R&D ROP S&E SME SEUPB Nomenclature of Territorial Units for Statistics Operational Programme Purchasing Power Standards Research and Development Regional Operational Programme Southern and Eastern region Small and Medium-sized Enterprise Special European Union Programme Body 5

Policy Department B: Structural and Cohesion Policies 6

Economic, social and territorial situation of Ireland LIST OF FIGURES Figure 1: Map of Ireland 9 Figure 2: Key Data 10 Figure 3: Main Irish goods exports and imports 13 Figure 4: County and City Councils division 15 Figure 5: Regions in Ireland, 2007-2013 20 Figure 6: Structural Funds for the 2007-2013 period. Breakdown by theme as proposed by Ireland in its draft operational programmes 21 Figure 7: OP Peace and Reconciliation 2007-2013 24 Figure 8: House of Waterford Crystal 26 Figure 9: Key elements of GIFT project 27 Figure 10: National Broadband Scheme 27 Figure 11: Degree of Urbanisation in Ireland 2011 31 LIST OF TABLES Table 1: Real GDP growth rate in Ireland compared to the EU average 11 Table 2: General government gross debt (in % of GDP) 11 Table 3: Inflation rate in Ireland compared to the EU average 12 Table 4: Population (in million) 13 Table 5: Crude rate of net migration plus adjustment (per thousand inhabitants) 14 Table 6: Unemployment rate (in %) for all the population and the young below 25 14 Table 7: Structural funds for Ireland in EUR million 2007-2013 19 Table 8: OP Southern and Eastern 2007-2013 22 7

Policy Department B: Structural and Cohesion Policies Table 9: OP Border, Midland and Western 2007-2013 23 Table 10: OP Peace and Reconciliation 2007-2013 25 Table 11: Structural funds for Ireland in EUR million 2014-2020 30 8

Economic, social and territorial situation of Ireland 1. KEY FACTS AND FIGURES Figure 1: Map of Ireland Source: Eurostat Ireland (Éire) is a country located on the island of Ireland to the northwest of continental Europe. Ireland, comprising 26 counties, covers around 80% of the surface of the island. In the north-east of the island six counties of the Northern Ireland are located. They are governed by a power-sharing Executive and Assembly as established under the Good Friday Agreement. With a population of 4.59 million citizens, Ireland is the seventeenth biggest country in the European Union. Nearly one third of the population of the country lives in its capital, Dublin. The Irish and English are the official languages of the country. Ireland is a member of the Euro area but it is not a member of the Schengen area. It remains attached to its longstanding policy of neutrality, and is thus not a member of NATO. However, Ireland participates in NATO s Partnership for Peace programme. 9

Policy Department B: Structural and Cohesion Policies Figure 2: Key Data Area 69 797 km 2 Population 4 591 087 Population density (per km 2 ) 66.9 Official language Currency Irish, English EURO GDP per capita (PPS) 129* Growth rate 0.2%* Unemployment rate 14.7% Inflation rate 1.9%* Public deficit 8.2%* Public debt 117.4% of GDP* Source: Eurostat for 2013, * Data for 2012 1.1. Political and governmental structures Ireland is a republic and a parliamentary democracy. Its law is based on Common Law (modified by subsequent legislation) and on the Constitution of 1937. The Constitution of Ireland (Bunreacht na héireann) defines the powers and functions of the President (Uachtarán na héireann), both houses of the Parliament (Oireachtas) and the Government as well as outlines the fundamental rights of citizens. The President is the Head of State. He or she is elected by direct vote for a 7-year term and may not serve more than 2 terms. Michael D. Higgins has been the President of Ireland since November 2011. The President appoints the Prime Minister (Taoiseach) on the nomination of the House of Representatives. Other members of the government are appointed by the President on the nomination of the Prime Minister. Ireland s Parliament is composed of the President and two chambers: House of Representatives (Dáil Éireann) and Senate (Seanad Éireanne). The Dáil has 166 members (Teachtaí Dála) elected for a five-year term who are representing 43 constituencies. In each constituency there are three, four or five members elected by universal suffrage. The Seanad is comprised of 60 members (Senators). Eleven of them are nominated by the Prime Minister, while the rest are elected from a number of vocational panels and by graduates of universities. The main role of the Seanad is to revise legislation sent to it by the Dáil. Any amendments made by the Seanad, however, can still be rejected by the Dáil. The Seanad can also, with the exception of Finance Bills, initiate new legislation. Executive power is exercised by the Government divided into Departments. The Irish government is headed by the Prime Minister and has between 6 and 14 ministers. The Prime Minister, Deputy Prime Minister and Minister of Finance have to be members of the Parliament. The Government is responsible to the Dáil. Enda Kenny, the leader of Fine Gael, has been the Prime Minister since March 2011. 10

Economic, social and territorial situation of Ireland The main political parties currently represented in the Dáil are: Fine Gael - member of EPP; Labour Party - member of S&D; Fianna Fáil - member of ALDE; Sinn Féin - member of GUE/NGL. Although, in the elections to the European Parliament in Ireland in 2009 Sinn Féin did not win any seat, the party is also active in the Northern Ireland and there it won one mandate. The representative of Sinn Féin elected in the Northern Ireland is a member of the GUE/NGL. Another party represented in the European Parliament is: Socialist Party - member of GUE/NGL. Currently, Ireland has 12 Members of the European Parliament. This number will fall to 11 for the 2014-2019 mandate. 1.2. Economy When joining the European Communities in 1973, Ireland was one of the poorest Member States. However, since that time it has transformed itself from a largely agricultural society into a modern, technologically advanced economy. Before the beginning of the economic crisis, Ireland had a very dynamic economy and gained the name of the Celtic Tiger. European structural and cohesion funds helped Ireland to push its economic development well above the EU average. In 2007 it reached 146% of the EU average GDP per capita in PPS. With a total annual GDP of almost EUR 164 billion (in 2012) Ireland is the fifteenth biggest economy in the European Union. Table 1: Real GDP growth rate in Ireland compared to the EU average 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Ireland 3.7 4.2 6.1 5.5 5.0-2.2-6.4-1.1 2.2 0.2 EU 1.5 2.6 2.2 3.4 3.2 0.4-4.5 2.0 1.6-0.4 Source: Eurostat However, overheated construction and banking sectors were very vulnerable when they faced the economic crisis in 2008. After the collapse of the construction and property markets, Irish banks required a large state support. The state had to recapitalize the biggest banks and this effort increased the state debt enormously. In 2010, Ireland had to ask for international help and took EUR 67.5 billion loan from the EU and the International Monetary Fund. Table 2: General government gross debt (in % of GDP) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Ireland 31.0 29.4 27.2 24.6 24.9 44.2 64.4 91.2 104.1 117.4 EU 61.9 62.2 62.7 61.5 58.9 62.2 74.5 80.0 82.4 85.2 Source: Eurostat The recession and high costs of support for Irish banks caused the Irish public debt to increase from less than 25% of GDP in 2007 to almost 120% in 2012. Additionally the 11

Policy Department B: Structural and Cohesion Policies public deficit grew very high and reached 8.2% of GDP in 2012. The state revenues in 2012 amounted to around 35% of GDP and the expenditures exceeded 42% of GDP. 1 In the 1990s and in the beginning of 21 st century, Ireland's economy was burdened by inflation, usually exceeding the EU average. In particular, housing prices were increasing over 10% a year. However, with the economic crisis inflation dropped and between 2009 and 2010 Ireland experienced deflation. Prices in the housing market have dropped by almost a half since 2007. Table 3: Inflation rate in Ireland compared to the EU average 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Ireland 4.0 2.3 2.2 2.7 2.9 3.1-1.7-1.6 1.2 1.9 EU 2.0 2.0 2.2 2.2 2.3 3.7 1.0 2.1 3.1 2.6 Source: Eurostat Currently, Ireland is slowly recovering and has regained access to the financial markets. In December 2013, it became the first country to exit the bailout program. The unemployment rate is slowly decreasing giving good perspectives for the future. The country has still the third highest GDP per capita in the European Union, after Luxembourg and Austria. 2 Ireland is well known for its moderate corporate taxes (currently at the level of 12.5%), a well-educated workforce and good business environment. In 2013, it was ranked the fifteenth (out of 185 countries) in the World Bank's "Easy of doing business" ranking. These conditions are very attractive to foreign investments, in particular in the IT sector. Ireland has been the choice of many renowned corporations e.g. Intel, Google, Microsoft, Facebook and Amazon. Ireland's economy is strongly export oriented. Its exports have already recovered after the crisis of 2008-2009 and in 2012 exports of goods and services were the highest in its history. In total, exports of goods and services exceeded EUR 182 billion and the foreign trade surplus reached EUR 46 billion in 2012. 3 Services exports account for almost half of the total exports, and computer services exports, being its largest category, amounted to EUR 36.5 billion in 2012. In 2013, Ireland had the third largest trade surplus in Europe, after Germany and the Netherlands. 4 Almost 60% of Irish goods exports are sent to the European Union. Its main trading partners are the United States (20%), the United Kingdom (15%), Belgium (14.7%), Germany (8.2%) and Switzerland (5.5%). Also almost 60% Irish goods imports come from the EU. The main partners are the United Kingdom (31.4%), the United States (13%), Germany (8.1%), China (6.8%) and the Netherlands (5.5%). Chemical products (including medical, pharmaceutical and organic chemicals products) are responsible for almost 60% of Irish goods exports. Main categories of goods imports are: machinery and transport equipment (around 25%), chemical products (20%) and mineral fuels (14%). 5 1 2 3 4 5 Source: OECD Economic Surveys: Ireland 2013. Source: Eurostat - GDP per capita in PPS for 2012. Source: Irish Department of Jobs, Enterprise and Innovation. Source: Eurostat, data for the period January-November 2013. Source: Central Statistics Office. data for 2012. 12

Economic, social and territorial situation of Ireland Figure 3: Main Irish goods exports and imports EXPORTS IMPORTS Source: Central Statistics Office for 2012 Ireland's agriculture and food industry are responsible for 7% of country s GDP. They employ around 150,000 people and export products worth over EUR 9 billion. Around 5 million hectares (70% of the total surface) are used for agriculture and forestry. The main sectors of agricultural industry are beef and dairying. 6 Tourism is another important sector of Ireland's economy. Each year, Ireland is visited by around 7 million tourists. Tourism provides to its economy around EUR 3.4 billion a year. 7 1.3. Population Ireland has over 4.59 million inhabitants and its population is constantly growing. During the last 10 years it increased by almost 15%. It is the result of both: high natural population growth, which is the highest in the EU, and immigration. Table 4: Population (in million) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Ireland 4.02 4.11 4.20 4.34 4.45 4.45 4.54 4.57 4.58 4.59 Source: Eurostat Until the beginning of the economic crisis, Ireland was a destination country for a large number of immigrants, especially from the EU New Member States. However, this trend changed with the crisis and during the last years more people were leaving Ireland than entering. In 2006, Ireland had the highest surplus of net migration in the EU, but in 2012 it already had the highest deficit in the EU. In 2012, almost 12% of the inhabitants of Ireland were non-irish citizens. The biggest minorities are Polish (over 124,000 inhabitants) and UK nationals (over 112,000 inhabitants). 8 6 7 8 Source: Ireland in Brief. A general overview of Ireland s political, economic and cultural life, Department of Foreign Affairs and Trade. Idem. Source: Central Statistics Office. Data for 2011. 13

Policy Department B: Structural and Cohesion Policies Table 5: Crude rate of net migration plus adjustment (per thousand inhabitants) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Ireland 8.1 12.2 15.2 22.2 16.9-12.3 11.6-5.6-7.4-7.6 Source: Eurostat The Irish population is very young. The share of population under 25 years is the highest in the EU and in 2013 reached 33.6% (the EU average was 27.3). 9 Dublin with its surroundings has the biggest population in Ireland (1.27 million inhabitants). Other big cities together with their urban areas are Cork (519,000 inhabitants), Galway (250,000 inhabitants) and Limerick (191,000 inhabitants). 10 Until the beginning of the economic crisis, Ireland had a low level of unemployment. However, since 2008 it has drastically increased to 14.7%. The level of unemployment of youth under 25 is particularly high. Since 2012 the unemployment rate has been slowly decreasing. Table 6: Unemployment rate (in %) for all the population and the young below 25 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total population 4.5 4.4 4.5 4.7 6.4 12.0 13.9 14.7 14.7 13.1 Young below 25 8.7 8.6 8.7 9.1 13.3 24.0 27.6 29.1 30.4 26.6 Source: Eurostat 9 10 Source: Eurostat. Source: Central Statistics Office. Data for 2011. 14

Economic, social and territorial situation of Ireland 2. INSTITUTIONAL AND ADMINISTRATIVE FRAMEWORK FOR EU COHESION POLICY 2.1. Current administrative division of Ireland 11 Ireland is divided into 26 counties. Its local government system is currently administrated by 114 local authorities: 34 on the LAU1 level (29 County Councils and 5 City Councils); and 80 on a lower level (5 Borough Councils and 75 Town Councils) In addition Ireland is divided into: 8 Regional Authorities on the NUTS3 level; and 2 Regional Assemblies on the NUTS2 level. Figure 4: County and City Councils division Source: Local Government and the Elected Member, Department of the Environment, Heritage and Local Government, 2004 11 This chapter is based mainly on the information from the webpage of the Irish Department of the Environment, Community and Local Government. 15

Policy Department B: Structural and Cohesion Policies County and City Councils cover the entire territory of Ireland. Most of the 26 counties have one County Council but some counties also have a City Council and two of them are divided into more than one County Councils (Dublin County is divided into three County Councils and one City Council, and Tipperary County is divided into two County Councils). Borough and Town Councils do not cover the entire territory of Ireland, and thus cannot be used as LAU units. Borough and Town Councils are located in the area already covered by County Councils. Irish local governments provide the democratic representation of local communities. This role is recognised in the Irish constitution. Its Article 28A also guarantees direct elections for the Councils. Members of the Councils are elected in direct elections for a period of five years. They can be a member of only one County or City Council at the time. However, they can be also a member of one of the Borough or Town Council. The number of members of the Council depends of the size of the population living in the area of the Council. The elected councils are the main policy makers on the local level. They take the important decisions on policy and financial matters e.g. the adoption of the local budget, development plans etc. Each year, County and City Councils chose their Chairperson (Cathaoirleach). She or he is responsible for chairing the Council meeting and for maintenance of the order of meetings. Executive functions of the County and City Councils are performed by County and City Managers. They are appointed by the Councils for a term of seven years and are responsible for the day-to-day management of the local government s administration. The Council can suspend and remove a County/City Manager before the end of his/her term. Local governments do not only have a representational role but also an operational one. They are responsible for delivery services to their inhabitants, enterprises and other institutions active in their territory. These services generally include: Housing; Planning; Roads; Water supply; Environmental protection; Recreation and amenities; and Community infrastructure. Local authorities also play an important role in supporting economic development and enterprises at local level. 12 12 After Local Government Management Agency. 16

Economic, social and territorial situation of Ireland Irish local governments have multiple sources of revenues 13 : General and specific purpose state grants; Charges for goods and services e.g. water charges, parking charges etc.; Rates levied annually on the occupiers of commercial properties; Community Funds and Community Initiative Schemes; Charges for non-principal private residences. The eight Regional Authorities were established in 1994 and they help to co-ordinate some of the county and city activities. They also play a monitoring role in relation to the use of EU structural funds. Members of the Regional Authorities are not directly elected but are nominated by the local councils from among their own directly elected members. This facilitates the coordination of the City and County activities. Each Regional Authority has an Operational Committee and an EU Operational Committee that are responsible for the activities in the two main areas of their competences. The two Regional Assemblies (the Border Midland & Western Region and the Southern & Eastern Region) were established in 1999 under new structures for regionalisation. Their main responsibilities are: 14 to manage and monitor their respective Regional Operational Programmes under the structural funds; to promote coordination in the provision of public services across their areas; to monitor and make proposals in relation to the general impact of EU funding; to make public bodies aware of the regional implications of their policies and plans. These two Assemblies are also active in the European Territorial Cooperation programmes. Members of the Regional Assemblies are not directly elected. They are nominated by the local councils. 2.2. Local Government Reform of 2014 On 27 January 2014, the President of Ireland signed the Local Government Reform Act 2014 which introduces fundamental reorganisation of Irish local governments. After the local elections planned for 23 May 2014 the structure of the local governments will be largely modified. The reform will introduce 95 new municipal districts, which on 1 June 2014 will replace previous smaller 80 Borough and Town Councils. Municipal districts will include towns and their hinterlands. They will not be separate local authorities, but decision-making bodies. The role of district councillors will be performed by county councillors elected in the district. Local issues will be decided on district level while strategic issues will be decided on County 13 Source: webpage of the Irish Department of the Environment, Community and Local Government. 14 Source: webpage of the Irish Regions Office. 17

Policy Department B: Structural and Cohesion Policies level. Main competences of the municipal district will cover: local area plans, bye-laws, local charges and programmes of works e.g. roads, housing and amenities. The signed reform will also diminish the number of County and City Councils from 34 to 31. Waterford County Council will be merged with Waterford City Council, Limerick County Council will be merged with Limerick City Council and North Tipperary County Council will be merged with South Tipperary County Council. In addition, County and City Managers will be replaced by Chief Executives. The role of elected councils will be strengthened. Local government will have reinforced role in the area of the local economic development. New Local Community Development Committees will be created for better planning in the context of the local development. They will be responsible for preparation of Local Economic and Community Plans. The reform foresees the preparation of the plebiscite for the Dublin metropolitan area (consisting of three County Councils and one City Council). It will decide about new local government arrangements for this area and the possibility of direct elections of the Mayor that would perform the power of the executive for all four Councils. This plebiscite should be organised in 2014. The current eight regional authorities and two regional assemblies will be replaced by three regional assemblies. Their main competences will be linked to: - Preparation of Regional Spatial and Economic Strategies; - Management of EU investment programmes. When preparing Regional Spatial and Economic Strategies, regional assemblies will be obliged to consult its works with the local planning authorities. 2.3. Structural Funds management The two Regional Assemblies plays the main role in the implementation of EU structural funds in Ireland. They are the Managing Authorities for the two Irish Regional Operational Programmes (ROP). However, the current preparation of the Partnership Agreement is being coordinated by the Department of Public Expenditure and Reform. The initial consultations started in March 2013 and until the day of the preparation of this note, the final version of the Irish Partnership Agreement has not been approved. Managing Authorities for European Structural and Investment Funds, local governments and social partners are involved in the consultations. Regional Assemblies for the Border Midland and West Region (BMW) and for the Southern and Eastern Region (S&E) will also execute the role of Managing Authorities for the ROPs in the 2014-2020 financial period. They are responsible for consultations on the preparation of these programmes. 18

Economic, social and territorial situation of Ireland 3. EU COHESION POLICY IN IRELAND 2007-2013 3.1. Objectives and funds For the 2007-2013 period, Ireland was allocated an amount of around EUR 900 million 15 of Cohesion Policy funding: EUR 750 million under the Regional Competitiveness and Employment Objective; EUR 150 million under the European Territorial Co-operation Objective. To complement EU investment under the National Strategic Reference Framework (NSRF), the national Irish contribution is expected to reach the amount of over EUR 1.5 billion of public funding. That brings the total budget available for Cohesion Policy activities to almost EUR 2.5 billion. Ireland has translated the broad priorities from the NSRF into 3 Operational Programmes (OPs): Regional OP for the Border, Midland and Western region (EUR 146 million, ERDF); Regional OP for the Southern and Eastern region (EUR 229 million, ERDF); Country-wide OP Human Capital Investment (EUR 375 million, ESF). Table 7: Structural funds for Ireland in EUR million 2007-2013 Objective Fund EU National Public Total Regional Competitiveness and Employment ERDF 375 564 939 ESF 375 982 1357 Total Regional Competitiveness and Employment 750 Total European Territorial Cooperation 16 ERDF 150-150 Total 900 1546 2446 Source: European Commission, DG REGIO In the programming period 2007-2013 Southern and Eastern region was eligible as a Competitiveness and Employment region, and Border, Midland and Western region was eligible as a phasing-in region. Until January 2014, Ireland had already accumulated payments of over EUR 526 million, which means over 70% of the planned EU commitments. 17 This is the third highest result in the EU (after Portugal and Spain). 15 16 17 Unless otherwise indicated, all figures in this section are from the website of DG REGIO. Each Territorial Cooperation Programme includes a minimum of 15% co-financing from each participating Member State. Source: European Commission, DG REGIO. 19

Policy Department B: Structural and Cohesion Policies Figure 5: Regions in Ireland, 2007-2013 Source: European Commission, DG REGIO 3.2. NSRF and Operational Programmes 18 As laid down in Ireland's National Strategic Reference Framework, the EU funding will be invested in three themes and priorities: Promoting human capital investment by upskilling the workforce and increasing the participation and setting up of groups outside the workforce. It focuses on women, people with disabilities, single parents, travellers and ex-offenders. A special programme will target immigrants given their significant contribution to the economy. Supporting innovation, knowledge and entrepreneurship in the regions. The objective is to boost Research and Development (R&D) in areas and institutions where this has been lacking in the past. The aim is to double the number of PhD graduates over the 2007-2013 period and to continue to develop foreign direct investment. 18 Unless otherwise indicated, this chapter is based on the information from the website of DG REGIO. 20

Economic, social and territorial situation of Ireland Strengthening the competitiveness, attractiveness and connectivity of the National Spatial Strategy defined by the government. The aim is to improve access to quality infrastructure and to promote environmental and sustainable development. Ireland's NSRF includes a significant commitment to the Lisbon Strategy for jobs and growth, as it allocates a substantial share (85%) of its investment directly to elements of this strategy. Figure 6: Structural Funds for the 2007-2013 period. Breakdown by theme as proposed by Ireland in its draft operational programmes Source: European Commission, DG REGIO 21

Policy Department B: Structural and Cohesion Policies 3.4. OP 'Southern and Eastern' The Southern and Eastern region is supported within the framework of the "Regional Competitiveness and Employment" objective. The total budget for the OP 'Southern and Eastern' is EUR 367 million including EUR 146.6 million of the Community support from the ERDF. This represents almost 20% of Structural Funds allocations to Ireland. The main aim of the OP 'Southern and Eastern' is to contribute to increasing the productivity and competitiveness of the Region, to support sustainable development and to help improve quality of life through investment in the development of innovation and the knowledge economy, supporting the protection of the environment, sustainable development and the take-up of broadband and supporting city regeneration and town renewal. 19 This OP has four main priorities: Priority 1: Innovation and the Knowledge Economy This priority focuses on the Lisbon Agenda objectives: to develop further the knowledge, R&D, innovation and entrepreneurial base of the region's economy and to support collaboration and technology transfer between research institutions and the business. Priority 2: Environment and Accessibility This priority focuses on investments in renewable energy production and energy conservation and on increasing broadband take-up throughout the region. Priority 3: Sustainable Urban Development The aim of this priority is to enhance the attractiveness of the designated Gateways and Hubs as places to live in, to work in and to invest in. The central aim is to support and complement efforts to ensure that the cities and towns maximise their potential. Priority axis 4: Technical Assistance Support for programme management and implementation, including technical support, communications and publicity, financial control activities, research and evaluation actions. Table 8: OP Southern and Eastern 2007-2013 Priority axis Community funding National contribution Total funding Innovation and the Knowledge Economy Environment and Accessibility Sustainable Urban Development 96 000 000 144 000 000 240 000 000 26 000 000 39 000 000 65 000 000 20 000 000 30 000 000 50 000 000 Technical assistance 4 603 534 7 396 466 12 000 000 TOTAL 146 603 534 220 396 466 367 000 000 Source: European Commission, DG REGIO 19 Source: 'Southern and Eastern' Operational Programme. 22

Economic, social and territorial situation of Ireland 3.5. OP 'Border, Midland and Western' The Border, Midland and Western region is supported within the framework of the "Regional Competitiveness and Employment" objective as a Phasing-in region. Its total budget is EUR 457.5 million including EUR 228.8 million of the Community support from the ERDF. This represents over 30% of Structural Funds allocations to Ireland. The OP BMW was modified in 2009 and 2011. The main aim of the OP 'Border, Midland and Western' is to facilitate innovation, ensure sustainable development, improve accessibility and develop the urban fabric within the region, in order to enhance overall productivity and competitiveness. 20 The OP BMW has four main priorities: Priority 1: Innovation, Information and Communication Technologies (ICT) and Knowledge Economy The objective of this Priority is to enhance the research, innovation and ICT infrastructure and capacity of the BMW region, to promote entrepreneurship and enterprise development and to support collaboration and technology transfer between research institutions and the business sector that responds to the economic development needs of the region. Priority 2: Environment and Risk Prevention The objective of this Priority is to contribute to the sustainable development of urban and rural areas as well as protection and enhancement of the urban and rural environment. This priority stimulates energy efficiency, renewable energy deployment and the integration of sustainable energy practices into public policies. Priority 3: Urban Development and Secondary Transport Networks The objective of this Priority is to invest in integrated sustainable initiatives and to modernise the region's transport infrastructure. Priority 4: Technical Assistance Support for programme management and implementation, including technical support, communications and publicity, financial control activities, research and evaluation actions. Table 9: OP Border, Midland and Western 2007-2013 Priority axis Community funding National contribution Total funding Innovation, ICT and the Knowledge Economy Environment and Risk Prevention Urban Development and Secondary Transport Networks 100 000 000 100 000 000 200 000 000 37 500 000 37 500 000 75 000 000 89 000 000 89 000 000 178 000 000 Technical Assistance 2 258 838 2 258 838 4 517 676 TOTAL 228 758 838 228 758 838 457 517 676 Source: European Commission, DG REGIO 20 Source: 'Border, Midland and Western' Operational Programme. 23

Policy Department B: Structural and Cohesion Policies 3.6. European Territorial Cooperation The ERDF also contributes towards financing the European Territorial Cooperation objective consisting of three strands: cross-border, trans-national and interregional. Ireland takes part in the 10 territorial cooperation programmes: Three cross-border programmes with other EU Member States: o o o 'Ireland Wales' (with the UK); 'Northern Ireland, the Border Region of Ireland and Western Scotland' (with the UK); 'United Kingdom - Ireland' (PEACE III) - (with the UK). Three transnational programmes which cover larger areas of cooperation: o o o 'North-West Europe'; 'Atlantic Area'; 'Northern Periphery'. Four interregional cooperation programmes: INTERACT II, URBACT II, ESPON and INTERREG IVC (total budget for all the 27 EU Member States: EUR 443 million). For these activities, during the 2007-2013 period, Ireland had allocated EUR 150 million. 3.7. OP Peace and Reconciliation - PEACE Programme The Operational Programme Peace and Reconciliation, also called PEACE III Programme, is financed under the European Territorial Cooperation objective. Its total budget amounts to almost EUR 333 million and the EU contribution through the European Regional Development Fund amounts to EUR 225 million. The PEACE Programme aims to reinforce a peaceful and stable society by promoting reconciliation in Northern Ireland and the Border Region of Ireland (Louth, Monaghan, Cavan, Leitrim, Sligo and Donegal counties). It advances social and economic stability in the region by supporting actions that promote cohesion between the two communities. This Programme is a continuation of previous PEACE programmes (PEACE I and II). Figure 7: OP Peace and Reconciliation 2007-2013 Source: European Commission, DG REGIO 24

Economic, social and territorial situation of Ireland The main priorities of the OP Peace and Reconciliation are: Priority 1: Reconciling communities This priority focuses on building positive relations at the local level. It supports the collaboration between the public and private sectors that focus on reconciliation, cultural diversity and equality. It aims to establish cross-community and cross-border initiatives that improve trust and acceptance. In addition this priority focuses on acknowledging and dealing with the difficult past. It helps to handle the transition to peace and reconciliation and ensure that conflict victims and survivors are able to cope with the past on their own terms. Priority 2: Contributing to a shared society This priority focuses on the regeneration of urban, rural and border areas that appear derelict, segregated, under-used, threatening or unwelcoming. The purpose is to transform these areas into shared spaces. Programme provides funding for new, shared public spaces and help address the issues of physical segregation as manifested by peace walls and sectarian graffiti, flags or emblems. This priority aims also to develop the capacity of key institutions to deliver services in a manner that contribute to a shared society within Northern Ireland and on a cross-border basis. Priority 3: Technical assistance The programme will utilize technical assistance during implementation. Technical assistance will include administration, monitoring, evaluation and control. The International Fund for Ireland In 1986, British and Irish governments established an independent international organization to promote economic and social advance, and encourages contact, dialogue and reconciliation between nationalists and unionists throughout Ireland. The Fund s mission is to tackle the underlying causes of sectarianism and violence and to build reconciliation between people and within and between communities throughout the island of Ireland. Today, the International Fund for Ireland is financially supported by the European Union, United States of America, Canada, Australia and New Zealand. Total resources committed to the Fund to date amount to EUR 890 million. It funds over 5,800 projects across the island of Ireland. Table 10: OP Peace and Reconciliation 2007-2013 Priority axis Community funding National contribution Total funding Reconciling communities 128 952 254 61 966 046 190 918 300 Contributing to a shared society 82 402 656 39 597 344 122 000 000 Technical Assistance 13 490 738 6 482 769 19 973 507 TOTAL 224 845 648 108 046 159 332 891 807 Source: European Commission, DG REGIO 25

Policy Department B: Structural and Cohesion Policies 3.8. Implementation of Cohesion Policy - examples of projects Project: House of Waterford Crystal 21 After the closure of the Waterford Crystal manufacturing facility in 2009, 600 people lost their jobs. Waterford City Council developed a plan to re-establish a crystal manufacturing and visitor centre in the city. This action was supported with the European Regional Development Fund under the OP 'Southern and Eastern'. In the new centre, visitors can learn about the 200 years history of crystal-making in the town. The new Waterford Crystal Manufacturing Facility melts down more than 750 tonnes of crystal and produces more than 45 000 pieces each year using traditional methods. Figure 8: House of Waterford Crystal Source: European Commission, DG REGIO The House of Waterford Crystal project had a total cost of EUR 5.5 million, with the ERDF s contribution of EUR 2.7 million. The project was funded through the Southern and Eastern Regional Operational Programme 2007-13. Project: Green Innovation and Future Technologies 22 The Green Innovation Future Technologies (GIFT) project promotes sustainable development in the areas of the green economy, green tourism, waste management and green technology. It supports the up-skilling SME businesses and help to grow a sustainable green economy. This is achieved and facilitated through face to face and online workshops as well as networking events linked to the green business growth opportunities. The GIFT project is a collaboration between Bangor University in Wales and Waterford Institute of Technology and University College Dublin in Ireland. The GIFT project has a total budget of EUR 2.1 million, with the ERDF s contribution of EUR 1.1 million through the Ireland Wales Territorial Co-operation Programme 2007-2013. 21 Source: European Commission, Inforegio webpage. 22 Source: Webpage of the GIFT project http://giftnetworkproject.eu 26

Economic, social and territorial situation of Ireland Figure 9: Key elements of GIFT project Source: GIFT Project Project: National Broadband Scheme 23 The National Broadband Scheme project guarantees affordable, quality broadband to all the areas in Ireland. To do that, a private telecommunications provider was selected, through competitive tendering for the creation and operation of new broadband infrastructure in the areas that previously had no access to the high quality telecommunications infrastructure. Figure 10: National Broadband Scheme Source: European Commission, DG REGIO 23 Source: European Commission, Inforegio webpage. 27

Policy Department B: Structural and Cohesion Policies The National Broadband Scheme project had a total public contribution of EUR 79.8 million with the European Regional Development Fund s contribution of EUR 36 million The project was funded through the 2007-13 Border, Midland and Western and Southern and Eastern Regional Operational Programmes. 28

Economic, social and territorial situation of Ireland 4. EU COHESION POLICY IN IRELAND 2014-2020 4.1. Partnership Agreement In 2014, each EU Member State is required to prepare a Partnership Agreement - the document that will outline the priorities for the EU Cohesion Policy and its funds in the programming period 2014-2020. However, at the time of the preparation of this in-depth analysis the Irish Partnership Agreement has not yet been approved. Thus, the information provided in this document is based on the second draft of the Irish Partnership Agreement published in February 2014 on the webpage of the Irish Department of Public Expenditure and Reform. The consultations for this document will be closed on 7 March 2014. The Department of Public Expenditure and Reform has an overall responsibility for implementation of the EU structural funds in Ireland. It is, in particular, responsible for the preparation of the Partnership Agreement. In the programming period 2014-2020, each of the European Structural and Investment Funds in Ireland will have its own Operational Programmes. The European Social Fund will have one country-wide OP. The European Regional Development Fund will be implemented through two Regional Operational Programmes, one for the Border Midland & Western region, and one for the Southern & Eastern region. The Department of Education and Skills will exercise the role of the Managing Authority for the ESF OP. For the ROPs the role of Managing Authorities will be exercised by the two Regional Assemblies: Border Midland & Western Regional Assembly and Southern & Eastern Regional Assembly. Currently, Border Midland & Western Regional Assembly and Southern & Eastern Regional Assembly are preparing drafts of their Regional Operational Programmes. 4.2. Budget For the programming period 2014-2020, Ireland has been allocated an amount of EUR 1017 million (in 2011 prices) of Cohesion Policy funding: 24 EUR 869 million under the Investments for Growth and Jobs goal; EUR 148 million under the European Territorial Co-operation goal. In 2014 prices it is already EUR 1120.5 million: EUR 951.6 million under the Investments for Growth and Jobs goal, and EUR 168.8 million under the European Territorial Cooperation goal. In addition, Ireland has been allocated EUR 68.1 million for the Youth Employment Initiative. In the programming period 2014-2020, both regions: Southern and Eastern region and Border, Midland and Western region are eligible as more developed regions. 24 Source: European Commission. 29

Policy Department B: Structural and Cohesion Policies Ireland plans to translate the broad priorities from the Partnership Agreement, related to the ERDF and ESF, into 3 Operational Programmes (OPs): Regional OP for the Border, Midland and Western region (EUR 178.7 million, ERDF); Regional OP for the Southern and Eastern region (EUR 278.1 million, ERDF); Country-wide OP Human Capital Investment (EUR 494.9 million, ESF). Table 11: List of Programmes and Allocations 2014-2020 (in EUR million, in 2014 prices) Programme title Southern & Eastern Regional OP Border, Midland & Western Regional OP Human Capital Investment OP Fund Total 2014 2015 2016 2017 2018 2019 2020 ERDF 278.1 37.4 38.2 38.9 39.7 40.5 41.3 42.1 ERDF 178.7 24.0 24.5 25.0 25.5 26.0 26.6 27.1 ESF 494.9 66.6 67.9 69.3 70.6 72.0 73.5 75.0 Source: Draft Partnership Agreement 4.3. European Territorial Cooperation In the 2014-2020 period, Ireland will participate in the following European Territorial Cooperation Programmes: Ireland-Scotland-Northern Ireland Cross-Border Programme; Ireland-Wales Programme Cross-Border Programme; Atlantic Area Transnational Co-operation Programme; Northern Periphery and Arctic Transnational Co-operation Programme; North West Europe Transnational Co-operation Programme; and INTERREG V Inter-regional Programme. Ireland will also participate in the PEACE IV Programme, the continuation of the previous PEACE programmes, which aims to reinforce progress towards a peaceful and stable society and to promote reconciliation through building positive relations, creating shared public spaces and developing key institutional capacities for a shared society. In the period 2014-2020, ERDF will provide EUR 148 million for the European Territorial Cooperation goal in Ireland. 25 Information about the Operational Programmes and their budgets for the period 2014-2020 are based on the draft of the Irish Partnership Agreement published in February 2014 on the webpage of the Department of Public Expenditure and Reform. The final version can be modified. 30

Economic, social and territorial situation of Ireland 4.4. Urban policy Sustainable Urban Development is one of the important objectives of EU Cohesion Policy in the 2014-2020 period. Ireland will undertake it through specific priority axis in its Regional Operational Programmes. It will dedicate around EUR 46 million to it. Ireland has broad experience in the implementation of its urban policy. The current National Spatial Strategy 2002-2020 defines a network of nine competitive urban Gateways supported by additional nine Hub towns. When using the Eurostat methodology, for identification of cities for the Urban Development Platform, most urbanised Irish regions are Dublin, Cork, Galway, Waterford and Limerick. All of the above cities, with the exception of Galway, are in the S&E region. 26 Figure 11: Degree of urbanisation in Ireland 2011 Source: European Commission, DG REGIO 26 Source: Draft Partnership Agreement. 31

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Economic, social and territorial situation of Ireland SUMMARY Ireland is the seventeenth largest Member State of the European Union. It is located on the island of Ireland to the northwest of continental Europe. It shares a border with the Northern Ireland, which is governed by a power-sharing Executive and Assembly as established under the Good Friday Agreement. Ireland is a republic. The President, currently Michael D. Higgins, is the Head of State. Ireland s Parliament is composed of the President and two chambers: the House of Representatives (Dáil Éireann) and the Senate (Seanad Éireanne). Members of the Dáil are elected in direct elections for a period of five years. Members of the Seanad are nominated by the Prime Minister and a number of vocational panels. Executive power is exercised by the Government divided into Departments. It is headed by the Prime Minister (Taoiseach), currently Enda Kenny. Currently, Ireland is divided into 114 local governments: 34 County and City Councils and 80 Borough and Town Councils. Members of these councils are elected in direct elections for a period of five years. In addition, Ireland is divided into eight Regional Authorities and two Regional Assemblies that have mainly a coordinative role for local governments and an important role in the implementation of EU structural funds. Members of Regional Authorities and Assemblies are nominated by the councils from among their members. In 2014, Ireland decided to reform its local governments system. The number and competences of local governments will be changed after the local elections planned for May 2014. Some County and City Councils will be merged. Borough and Town Councils will be replaced by 95 municipality districts. When joining the European Communities in 1973, Ireland was one of the poorest Member States. However, series of reforms and good use of European funds transformed and boosted the Irish economy. In 2007 it reached 146% of the EU average GDP per capita in PPS. However, overheated construction and banking sectors were very vulnerable to the economic crisis which started in 2008. To support its banking sector Ireland had to request financial help from the European Union and the International Monetary Fund. After the hard times of the crisis in 2009-2010, Ireland s economy is slowly recovering. In December 2013, Ireland became the first country to exit the bailout program. For 2007 2013, Ireland has been allocated a total of EUR 900 million of Cohesion Policy funding: EUR 750 million under the Regional Competitiveness and Employment Objective and EUR 150 million under the European Territorial Co-operation objective. The whole territory of Ireland is eligible under the Regional Competitiveness and Employment objective. The use of EU funds is planned in the two Regional Operational Programmes (EUR 375 million, ERDF), one country-wide OP Human Capital Investment (EUR 375 million, ESF) and 10 territorial co-operation programmes. For 2014 2020, Ireland has been allocated a total of EUR 1017 million of Cohesion Policy funding: EUR 869 million under the Investments for Growth and Jobs goal and EUR 148 million under the European Territorial Co-operation goal. Both Irish regions are considered to be more developed regions. The use of EU funds is planned in the two Regional Operational Programmes (ERDF), one country-wide OP Human Capital Investment (ESF) and territorial cooperation programmes. 33

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Economic, social and territorial situation of Ireland REFERENCES A strategy for Growth. Medium-Term Economic Strategy 2014-2020, Stationary Office, December 2013 Country Fact Sheet Ireland, European Commission DG REGIO, July 2013. Country Report. Ireland, Economist Intelligence Unit, September 2012. Ireland in Brief. A general overview of Ireland s political, economic and cultural life, Department of Foreign Affairs and Trade, January 2013 Local Government and the Elected Member, Department of the Environment, Heritage and Local Government, 2004 OECD Economic Surveys Ireland, OECD, September 2013. Operational Programme 'PEACE III' Position of the Commission Services on the development of Partnership Agreement and programmes in IRELAND for the period 2014-2020, European Commission, 09/11/2012 Regional Operational Programme 'Border, Midland and Western 2007-2013' Regional Operational Programme 'Southern and Eastern 2007-2013' Websites: http://www.bmwassembly.ie/index.html - Border, Midland and Western Regional Assembly http://www.citizensinformation.ie Citizens Information Board http://www.cso.ie - Irish Central Statistics Office http://www.djei.ie Department of Jobs, Enterprise and Innovation http://www.doingbusiness.org - Doing Business Project http://www.esf.ie ESF in Ireland http://www.environ.ie Department of the Environment, Community and Local Government http://www.enterprise-ireland.com Enterprise Ireland http://www.eustructuralfunds.gov.ie - EU Structural Funds in Ireland http://giftnetworkproject.eu - GIFT project https://www.internationalfundforireland.com - International Fund for Ireland http://www.iro.ie Irish Regions Office http://www.lgma.ie - Local Government Management Agency http://www.oireachtas.ie Irish Parliament http://www.president.ie Irish President http://www.seregassembly.ie - Southern and Eastern Regional Assembly http://www.taoiseach.ie Irish Prime Minister 35

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