Ireland qualifies for Objective 1 status under the Structural Fund Regulations 1994-1999 by virtue of the fact that per capita GDP for the three years 1988, 1989 and 1990 was less than 75 per cent of the average in the European Union. The list of regions covered by Objective 1 is contained in Annex 1 to the Framework Regulation. The list includes: “Ireland, the entire country”. Article 8 of the regulation states that this list will be applicable for six years from 1 January 1994. It further states that before the end of this period the list will be reviewed and a new list may be established to apply for the following period. Therefore, there will be no change in Ireland's Objective 1 status in the period up to 1999.
The Government is monitoring, and will continue to monitor, all aspects of Ireland's position in relation to eligibility for Structural Funds especially as a consequence of an increase in Ireland's GDP per capita as a percentage of the European Union average. The improvement in Ireland's position is welcome and is a tribute to the successful implementation of our stabilisation policies and to the productive use which has been made of the EU Structural Funds which have enabled our economy to grow. As I have said, Objective 1 status for the period 1994-99 is based on GDP per capita. In the case of Ireland, GNP would be a more accurate measure of prosperity than GDP. The use of per capita GDP as a criterion for comparison of countries' income has defects. In particular, GDP measures output, not incomes. In the case of a country such as Ireland which has a sizeable net outflow of factor payments, the GDP based measure considerably overstates the country's relative income. GNP allows for profit repatriation and payments of debt interest to foreigners. It is, therefore, a better measure of the income which is available within the country. Per capita GNP has risen from about 58 per cent of the EU average in 1985 to about 69 per cent in 1993. This figure is predicted to rise to about 70 per cent in 1994. The gap between GDP and GNP is generally much smaller in the other member states.