Eurozone spending power dwarfs any post-Brexit losses

THE potential loss of Britain’s £12.9bn contribution to the EU coffers has generated a lot of doom-laden headlines about what the knock-on effects will be for CAP and direct payments to farmers.

The general consensus among farm organisations and media commentators here is that Irish farming will just have to suck it up as farm subsidies (worth approximately €1.8bn to Ireland last year) are reduced in line with the loss of British payments to Brussels.

That line of thinking however does no credit to the abilities of our civil servants or EU lobbyists.

The EU and the eurozone are both far bigger and far more resilient entities than some would have us believe.

I would go so far as to argue that a proposed post-Brexit overhaul of the CAP budget, currently set at €58bn per annum, could yet benefit Irish farmers.

In January 2015, the governing council of the European Central Bank (ECB) announced plans to purchase bonds issued by euro area central governments, agencies and European institutions. This policy is known as “quantitative easing”.

These monthly asset purchases were set at €60bn per month until September 2016.

In effect the ECB had set in motion a massive money printing programme aimed at insuring that the banking sector across the eurozone would have sufficient funds to insure the stability of the sector, thus stabilising broader economic activity in the eurozone. That “quantitative easing” policy was extended beyond September 2016 with the total amount of money created to date standing at over €1 trillion.

Set against the figure, the potential loss of the British contribution to Brussels looks a lot less daunting and threatening for Irish farming.

There is a real possibility that once talks begin in earnest on Brexit one of the priorities will be calculating a new budget for the EU out of which future CAP payments will be paid.

As these negotiations proceed, the eurozone countries will lobby for governments to be allowed more latitude in how they support indigenous industries.

In our case, targeted farm production and development plans could see additional monies made available from our national exchequer.

Part of the rationale for this argument goes back to the €1 trillion plus of quantitative easing created for the banks and other institutions over the last few years.

Ireland and other eurozone governments could argue that as the money was created to assist economic growth and stability, why not allow eurozone countries direct access to some this “new money”.

While some might argue