The European Commission has this week approved the map determining the maximum levels of grant-aid payable by the State to businesses in different parts of the Republic for the period 2000-2006.
The decision has been welcomed by the Tanaiste and Minister for Enterprise, Trade, and Employment, Ms Harney, who said the Commission's decision would help give a sharper focus to the Government's own regional policy of spreading investment.
In line with its determination to get coherence between its structural funding priorities and Stateaid policies - known confusingly as "regional aids" - the key division on the map corresponds to the new Objective One region. This involves the 13 counties of the Border, West and Midlands, which it has been agreed will retain the highest level of structural funding.
The State may also continue to fund up to 40 per cent of investment in this region (an "A region"), with small and medium sized enterprises (SMEs) with less than 250 employees able to receive up to 15 per cent more.
There are five other "C regions" in the State for regional aids purposes, corresponding to those designated "Objective One in transition". The ceiling for aid in Dublin will be 17.5 per cent, in the Mid-East (Wicklow, Kildare and Meath) 18 per cent, and in the Mid-West, South-East and South-West 20 per cent.
In each case there is a 10 per cent higher ceiling for SMEs.
The Commission has been determined to cut back the level of State aid to industry, and the current revision of the guidelines is significantly cutting the scale of maximum payments and reducing the coverage within the EU of such payments from 47 per cent to 42 per cent.
In the previous guidelines maximum levels of grant aid of 71 per cent for the West and even 75 per cent for the Gaeltacht were acceptable. Other regions' ceilings come down from 51 per cent.
Operational aid for day-to-day expenditure is now ruled out. Special provision is made for investments in plants like call centres where the relative capital and labour costs are low.
