Dublin set to change tack on regional fund reform

Date: 01/10/1998

By Myles Neligan

THE Irish government is poised to change its tactics in negotiations on the reform of the EU's regional funds, just days before Union foreign ministers meet for the first major round of bargaining on the proposed overhaul.

The whole of Ireland currently benefits from the most generous levels of EU funding, but is set to lose its special status under proposed changes to the structural fund rules because of its strong economic performance.

Until now, Dublin has argued for a long transitional period before this happens. But it is now preparing to opt for a regional approach, pushing instead for 13 Irish counties in the west, south and border areas to be given 'Objective 1' status, thereby qualifying for the highest level of EU funding available. It also plans to argue that the counties bordering with Northern Ireland need extra assistance to bolster the peace process.

The aim is to ensure that Ireland's poorest areas continue to benefit from high public investment, even though the country as a whole is due to lose its Objective 1 status because the average gross domestic product per head has risen above the cut-off point, set at 75% of the EU average.

"It is a shift in our thinking. The idea is to give an extra push to these regions, none of which has shared in the fortunes of the Celtic tiger," said an Irish official.

While Dublin's move is unlikely to increase Ireland's share of the available cash, it reflects a significant change in strategy which is likely to be frowned upon by the European Commission.

Regional Affairs Commissioner Monika Wulf-Mathies has already warned governments against regionalising their territory if their only objective is to increase their overall share of EU funds, saying that only regional subdivisions with full administrative structures will be considered.

"It would become problematic if every country were to carve up its territory like this, because that would put the coherence of our reforms at risk," said a Commission official.

Irish officials stress that the plan now under consideration would not increase the country's overall income, and point out that each of the counties in question is a long-established administrative entity. They say the Commission's decision in June to recognise the UK county of Cornwall as an Objective 1 region in its own right, even though it has traditionally been administratively linked with its far more prosperous neighbour Devon, has set an important precedent.

EU foreign ministers are due to hold their first in-depth talks on reforming the structural funds and sharing out the 210 billion ecu set aside for regional spending from 2000 to 2006 at their meeting next Monday (5 October). Negotiations have been held up by the German elections, but are set to move into top gear now that the voters have delivered their verdict.