"It will be detrimental": EU region reclassification to hit Mayo

Mayo and several other western counties face a significant reduction in European Union infrastructure funding after the European Commission reclassified Ireland's North West region.

It’s a change that local officials have warned will make large-scale investment projects markedly less attractive to the central government from 2028 onwards. Infrastructure projects in the vital areas of for road, rail and airport projects could be impacted. 

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The Commission has confirmed that the wider northern region of Ireland will be upgraded from a transition region to a more developed region for the next EU funding period, covering 2028 to 2034.

Tom Gilligan, Director of Services with Claremorris Swinford Municipal District at Mayo County Council, set out the practical consequences at a recent council meeting.

"If a €100 million project is taking place, it will receive €40 million instead of €60 million from the EU, and the government will have to fund the gap. This will make it less appealing for the government to fund the project."

Mr Gilligan was blunt about what this means for the county. "Unfortunately, it will have an impact in relation to Mayo. It will be detrimental," he told councillors.

The reclassification affects all counties within the NWRA's remit: Galway, Mayo, Roscommon, Sligo and Donegal and the border counties of Leitrim, Cavan and Monaghan.

Under the current transition region designation, the EU co-finances eligible infrastructure projects at 60%. From 2028, that rate drops to 40 percent — meaning €20 million less European money flowing into every €100 million project, with the Irish exchequer expected to cover the difference.

Leprechaun economics

Charlestown councillor Gerry Murray argued that the reclassification is rooted in a distortion in how Ireland's national wealth is measured at EU level. He pointed to the outsized role played by multinational corporations in inflating Ireland's GDP per capita figures — a phenomenon that makes the country appear far more prosperous than citizens in the west actually experience.

"It's all of the profits that are being earned abroad and being repatriated — Apple, Yahoo and all these companies — that skews the GDP per head, bringing it up. It's kind of artificial, and the Commission have raised that themselves."

The Northern and Western Regional Assembly (NWRA)'s economist John Daly explained that it is impossible to determine the true size of the Mayo economy with precision. This is because some large multinationals located in Mayo generate revenues so significant that the CSO cannot release county-level figures for confidentiality reasons.

Speaking to The Mayo News, Mr Daly said the reclassification appears to have been "predominantly driven by the three counties of the west — particularly Galway." Galway accounts for almost 40% of economic output across the northern and western region and 58% of all employment in IDA client companies. Its GDP per capita now stands at 133% of the EU27 average. Incomes in Galway are 10% above the regional average, and the county's share of the regional population has grown from 27.5% in the 1990s to 31% in the latest census.

The border counties tell a starkly different story. Donegal, Cavan, Sligo, Leitrim and Monaghan have a combined GDP per capita of just 68% — or 70% during the Commission's evaluation period — of the EU average.

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Even within the western counties, disparities exist. By contrast to Galway's performance, Galway, Mayo and Roscommon together run at 129% of the EU27 average — a figure that masks significant differences between counties and conceals the fact that much of the growth is concentrated in and around the Galway city metropolitan area, driven by employers such as Dexcom in Athenry and the Boston Scientific and Medtronic facilities in Galway city.

With EU structural funding set to diminish for the region, the question being raised by officials and commentators alike is whether Ireland should now consider an internal equivalent — a domestic structural fund that could ensure counties such as Mayo and the border counties continue to attract the investment they need.

Funded by the Local Democracy Reporting Scheme