EU's number crunchers to decide on `two-nation' funding status

Monika Wulf-Mathies had little to say on Tuesday about the decision to regionalise Ireland

Monika Wulf-Mathies had little to say on Tuesday about the decision to regionalise Ireland. "It is up to Eurostat to examine the case based on its general principle that changes have to be justified on statistical grounds and reflect a distinct administrative reality."

The European Union's regional affairs commissioner made it sound so simple - and it is.

Eurostat, the EU's independent statistical service, must decide if the 13 counties which form the two regions of the Border counties (Donegal, Leitrim, Sligo, Cavan, Monaghan and Louth) and the west (Mayo, Roscommon and Galway) have a wealth which places them below the threshold - calculated as being 75 per cent of the EU average gross domestic product - and therefore eligible for consideration for maximum EU funds.

According to Eurostat, the answer is yes. It says the GDP figure for the 13 is 72.3. The Central Statistics Office is understood to estimate that the addition of Clare and Kerry to the list will add a further one percentage point.

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Yet, notwithstanding such figures, the statistical service must also establish if there is a broader economic justification for this region of 15 counties as an entity distinct from the remainder of the State. In other words, whether there are in effect two economies, functioning at different speeds, in the State.

Whatever rationale Eurostat applies to the two parts of the State, it will also have to apply to the Government's request to subdivide two regions, the south-west and mid-west, by transferring Kerry and Clare into the new region for which Objective 1 status is being sought.

The case for regarding midland west (Clare, Limerick and Tipperary north) as a distinct economic unit is not in the public domain because the Government is refusing to publish the county-level GDP figures. The same is true of Cork and Kerry.

As regards the rest of the State, in the other 11 counties, from 1991 to 1996 wealth grew by between 10 and 45 per cent, putting them collectively well above the 75 per cent threshold.

What of the other criteria which Eurostat must consider? Do the two parts of the State, assuming the division is allowed, reflect any "distinct administrative reality"?

Although a somewhat more nebulous concept, the Commission has been anxious in re cent weeks to insist that the extent of regional government structures required to meet this criterion is largely a matter for the member-state. The Government has pledged to discuss the detail with Brussels.

In the meantime, it is worth noting that Portugal held a referendum earlier this month on the idea of redrawing regional boundaries

and the people rejected the suggestion. Despite substantial differences in wealth between the north of Portugal and Lisbon, the coastal capital in the central part of the country, and strong evidence that structural funds had been unfairly channelled to favour Lisbon, the vote reflected a very evenly spread 2-1 opposition to the creation of new regional structures.

The Portuguese people seem to have been persuaded that if there is a failure of the bureaucracy to spread the benefits of growth throughout the country, it will not be resolved by creating a new layer of bureaucracy at regional level. Strong backing from Oporto in the north for the proposal failed to materialise, leaving the government with egg all over its face.