Since the 1960s, European Union member countries have pooled resources together to finance projects that make a difference to the lives of European citizens. Today, this includes creating growth and jobs, environmental protection, reducing economic gaps between EU regions and combatting terrorism and organised crime.
The EU budget also permits a significant level of investment in research and innovation so that Europe can compete with other global players; more so than if each member country went it alone.
For Ireland, the EU budget has been instrumental in transforming our economy from an antiquated, agriculture dependent economy to one largely driven by hi-tech industry and global exports.
It has also funded a number of important infrastructure projects such as major inter-urban roads, including the M4 between Dublin and Galway and the M9 between Kilcullen and Waterford as well as the Dublin Port Tunnel, the completion of the M50 and the DART. The EU has also provided over €537 million towards the construction of the Celtic Interconnector, a high-voltage submarine power cable that will link the electricity grids of Ireland and France allowing Ireland to export surplus renewable (wind and solar) energy to France during times of excess generation and to import from France when needed.
How the EU budget works in Ireland
The EU budget is complementary to Ireland’s national budget and comes into play when it is more effective to spend money at the EU level than at the local, regional or national level. In 2023, Ireland contributed €3.69 billion of the total EU revenue of €248 billion or about 0.7% of the Irish economy.
In the same year, EU investment back into Ireland amounted to €2.26 billion including:
- €1.5 billion on sustainable growth: natural resources and the environment
- €285 million on single market, innovation and digital and
- €177 million on cohesion, resilience and values.
In addition to the investment in Ireland, the EU budget provides support in other areas, including:
- Economic development of less wealthy EU countries
- Assistance in situations of natural disasters
- Development aid and assistance to EU neighbours and third countries
What are the main EU investment areas for Ireland?
The EU budget provides financial support to farmers, students, scientists, NGOs, SMEs, towns, regions and many other beneficiaries in Ireland.
Most of Ireland’s EU funding is for agriculture, rural development and nature conservation.
For example, the EU funded a €50 million project to redevelop the Fishery Harbour Centre in Killybegs, cementing Killybegs’ position as the premier port of Ireland’s six designated Fishery Harbour Centres.
Another project that has received EU funding is Ireland's Traditional Farm Buildings Scheme. The Scheme was set up in partnership with the Department of Agriculture, Food and the Marine with the aim of giving Irish farmers the skills to restore traditional buildings. Between 70 and 80 projects are supported each year and, in 2024, the Scheme won a European Heritage Award.
The second largest share of Ireland’s EU funding goes to growth and jobs, including research and innovation. For example, the HECATE project co-ordinated by Collins Aerospace in Cork, has received over €34 million in Horizon Europe funding to help develop hybrid-electric regional aircraft that combine traditional fuel engines with electric propulsion to reduce fuel consumption, emissions, and noise. The EU is also providing funding of over €112 million to infrastructure projects to improve the efficiency of Dublin and Cork ports.
Regional and social policy is the third largest category of EU funding for Ireland.
Other recent projects supported by EU funding include:
- The construction of a new EU-funded pedestrian and cycle bridge in Galway City. The Salmon Weir Pedestrian and Cycle Bridge Project received a contribution of €3.5 million from the European Regional Development Fund and is the first bridge to be built over the river Corrib in over 30 years;
- EU Life programme funding is helping to conserve and protect bogs around Ireland. The €20 million LIFE IP Wild Atlantic Nature project is working on conserving and protecting blanket bog habitat in the north-west Ireland while the €10 million LIFE Peatlands and People project is working to restore and rehabilitate peatlands across Ireland's midlands.
- Cork-based diagnostics company Altratech received an investment of €10.5 million from the European Innovation Council (EIC) Accelerator in 2024 to scale up development of a handheld molecular testing device that can provide healthcare providers and patients with instant, reliable diagnostic results outside of clinical settings.
For more, see our EU stories page.
EU budget 2021-2027
Due to the COVID-19 pandemic, the European Union has strengthened its current long-term 2021-2027 budget. Together with a temporary NextGenerationEU recovery instrument, €1.8 trillion was made available to mitigate the damage caused by the pandemic and help Europe emerge from the crisis stronger and more resilient.
Ireland is expected to receive over €1.15 billion in Recovery and Resilience Facility grants. Projects funded to date include €64 million for Ireland's Digital Infrastructure for Schools programme and €114 million for training programmes to equip construction professionals in Ireland with the skills to build well-insulated homes and retrofit Irish houses with the latest energy-saving technologies.
Ireland will also receive almost €1.2 billion in Cohesion Policy allocations from the latest long-term EU budget (2021-2027), as well as just over €8.3 billion in direct payments from the European Agricultural Guarantee Fund (EAGF). There will also be €2.25 billion available through the European Agricultural Fund for Rural Development.
EU recovery plan and NextGenerationEU for Ireland
The EU budget powering the recovery plan for Europe
More detail on Ireland’s (and other EU countries) budgets
The EU’s 2021-2027 long-term budget & NextGenerationEU: Facts and figures
Background information
How does the EU-wide budget work?
The EU budget is mainly dedicated to investment, so a long-term spending plan, known as the Multiannual Financial Framework (MFF) is adopted for a period of five to seven years. The MFF sets the maximum annual amounts (ceilings) that the EU will spend on each different category (headings).
Everybody benefits from the EU budget: from the added value of being part of the single market, and also addressing challenges together, such as fighting climate change, strengthening digital sovereignty and responding to the COVID-19 crisis.
The annual EU budget is decided democratically, with the participation of the European Commission, the EU countries (represented in the Council) and the European Parliament:
- The European Commission proposes a draft annual budget
- National governments (Council of the EU) and the European Parliament (representing EU citizens) can amend it
- National governments (Council of the EU) and the European Parliament (representing EU citizens) must approve it.
Where does the money come from?
The EU budget is financed from the following sources:
- A proportion of each country’s gross national income (GNI) in line with how wealthy they are
- Customs duties on imports from outside the EU
- An amount based on the value added tax collected by each EU country
- From 2021, a contribution based on the amount of non-recycled plastic packaging waste in each country
- Other revenue, including contributions from non-EU countries to certain programmes, interest on late payments and fines, as well as surplus from the previous year
- To finance NextGenerationEU, the European Commission will raise funds on the capital markets which will be repaid over a long-time horizon until 2058
Who decides how the money is spent?
Over the 2021-2027 period:
- National authorities manage around three quarters of the budget expenditure jointly with the European Commission (shared management)
- The European Commission and its agencies and delegations manage around 18% of the EU budget (direct management)
- Other international organisations, national agencies or third countries manage 8% of the EU budget (indirect management)
- For NextGenerationEU, 90% of the funds will be channelled via the Recovery and Resilience Facility (RRF). The RRF is an instrument to offer grants and loans to support reforms and investments in the EU countries at a total value of €723.8 billion.
The Commission has the ultimate responsibility for the execution of the totality of the budget to ensure that every euro spent is recorded and accounted for.
- The accounts are then audited by the Commission, national governments and other organisations, and actions are taken to address any weaknesses or errors.
- Finally, the European Parliament (in the name of EU citizens) votes to approve (or ‘discharge’) how the Commission has implemented the budget.
How the annual EU budget lifecycle works
The EU also has a number of bodies and tools to transparently communicate, and to detect, investigate and punish improper use of EU funds, corruption, the evasion of related taxes and levees, or serious misconduct within the EU institutions.
European Anti-Fraud Office (OLAF)
Related links