With the Government success in retaining Objective 1 funding status for the counties of the west, the Border and the midlands, it is important to remember that the rest of the State, including Co Kerry and Co Clare, will not find access to EU structural and cohesion funds suddenly cut off.
Assuming the deal announced by the Taoiseach on Friday night is accepted by the other EU heads of government at their Berlin summit on Wednesday and Thursday (and there is little doubt that it will be), Ireland's status will be classified as "Objective 1 in transition", meaning the State will continue to receive structural funds for the next seven years but at reduced levels, and cohesion funds for at least three to four years.
The Government was determined, however, that at least part of the State - defined as a single region for funding purposes up to now - would retain Objective 1 status. The inclusion of Co Kerry and Co Clare was too much for Eurostat, and the Government had to back down.
The 13 counties which comprise the region which Eurostat now accepts should qualify for retention of Objective 1 are Galway, Mayo, Sligo, Donegal, Roscommon, Leitrim, Longford, Cavan. Monaghan, Louth, Westmeath, Laois and Offaly.
Two arguments were made to justify the campaign to achieve Objective 1.
First, Objective 1 regions will attract greater direct funding from the EU structural and cohesion funds and, therefore, increase the State's total "take" from EU funds.
Second, Objective 1 regions are allowed retain maximum levels of State aids to industry, thus making them attractive places for foreign multinational companies to set up.
The first argument is often overstated. The best estimate, which has not been disputed by the Government, is that acceptance of Ireland's regionalisation plan would have benefited the State by £150 million over the next seven years.
This needs to be put in the context of a total expected "take" from EU funds of £2.5 billion to £3 billion over the next seven years, and an Exchequer surplus last year of £747 million, a figure expected to top £1 billion this year. In this context, the loss of £150 million over seven years is a relatively minor problem.
The second point, that Objective 1 regions are allowed retain maximum levels of State aid to industry, is more important.
The IDA has predicted that loss of Objective 1 status throughout the State would result in a significant decline in foreign investment. If no part of the State was to retain Objective 1 status, the Government was able to argue that the IDA would be able to offer grants at only half the level of those available in parts of Scotland and Wales which will retain Objective 1 status.
Co Kerry and Co Clare can console themselves because loss of Objective 1 status for them (and, indeed, every other county outside the 13) will be far from a total disaster. The IDA has been moving away from giving direct maximum cash grants and aid to industry in recent years anyway, and now concentrates on providing logistical assistance to new firms setting up in Ireland. Such assistance will be unaffected by the loss of Objective 1 status.
However, the IDA is very anxious to retain the option of offering foreign companies maximum State aids to encourage them to set up in the west or the Border region. In this the Government has been successful.
THE Government faced an uphill battle to convince the EU of its case. The EU Regional Affairs Commissioner had warned against "subsidy shopping". Parts of the State put forward as regions must be genuine, with real regional structures, rather than simply being convenient patchworks of counties put together for a grant-grabbing expedition. The Irish "regions", said the Commissioner, must "reflect a distinct administrative reality".
However, the new 15-county region finally put forward by the Government as a candidate for Objective 1 status was a diverse coalition and did not convince the EU authorities. The six counties in the present Border region (Donegal, Leitrim, Sligo, Cavan, Monaghan and Louth), the three counties in the western region (Mayo, Roscommon and Galway), and the four counties in the midlands (Offaly, Longford, Westmeath and Laois), all constitute established and accepted regions in themselves.
It was the inclusion of Co Clare and Co Kerry, plucked from the mid-west and southwest regions respectively, which failed to convince most observers that the move was dictated by anything other than new political considerations. It is widely believed despite Government denials that Co Kerry and Co Clare were included to keep the independent TD, Mr Jackie Healy-Rae, happy.
The Government was confident that this new "region" would fill the first criterion for Objective 1 status for structural funds: GDP per capita is below 75 per cent of the EU average. In the case of the initial 13 counties, Eurostat estimated the GDP per capita as 72.3 per cent of the EU average. The Government believed the late addition of Co Kerry and Co Clare would add just a further one percentage point to the figure.
It was always seen as uncertain whether the new region would fulfil the second Objective 1 criterion: that regions have genuine devolved regional structures.
Early last month it emerged that the Government proposed minimalist devolution of power to two new regional authorities to administer structural funds. The proposals came from the Department of Finance rather than Environment, indicating that they were a technical manoeuvre concerning the disbursement of money rather than a genuine revision of local government powers. The authorities were simply to process grants.
Eurostat, however, saw through the artificiality of the exercise and told the Government it was having none of it. Co Kerry and Co Clare were dropped with the same sort of ease dictated by expediency as when they were included in the first instance.