IN AN embarrassing setback for its regionalisation plans, the Government has been forced to drop Kerry and Clare from the areas earmarked for maximum EU funding.
Four months after submitting its application to Eurostat, the statistical branch of the EU Commission, the Government has finally conceded that the two counties cannot be included in the Objective 1 region for structural fund purposes.
The news was conveyed to Dublin on Thursday by Eurostat, but was made public by the Taoiseach, Mr Ahern, only last night after discussions at Government Buildings with the German Chancellor, Mr Gerhard Schroder.
Insisting that "we got practically all that we sought", the Taoiseach said "we are not entirely happy, but about 95 per cent happy", with the outcome. Eurostat made its decision on the basis that sub-regional areas agreed in 1994 "would be better staying intact".
"We have compromised on that decision. That is the minus," Mr Ahern said.
On the plus side, acceptance had been secured on including the Border counties, the midlands and the west in the Objective 1 region. The other 13 counties will be categorised as Objective 1 in Transition, receiving aid that will taper off over a number of years.
The package of structural funding to each of the two regions will be determined in the Berlin summit next week. The problem now facing the Government is fighting about the level of aid targeted at regions in transition - the non-objective 1 areas - which the German Foreign Minister, Mr Joschka Fischer, described last weekend as a particular problem that had to be resolved.
The Kerry South TD Mr Jackie Healy-Rae last night expressed deep disappointment at the decision, but said there was no question of his withdrawing his support for the Government.
"I did my best. I am quite certain that the Government, Bertie Ahern and Charlie McCreevy at least put us in the race. Where it went wrong I don't know, but the news is bad." The Fianna Fail chairman of the Mid West Regional Authority, Councillor Joe O'Gorman, accused the Government of "bungling" Clare's application. He said the late addition to the application was "a complete political farce".
Mr O'Gorman said: "Clare should have been in from the start. Why it wasn't I will never understand."
Meanwhile, the Government has a few weeks to decide on the replacement of Mr Padraig Flynn as EU Commissioner, and no decision will be made at Monday's Cabinet meeting.
According to Mr Schroder, the appointment of a new Commission president should be "a swift process and we will try to get it done as expeditiously as possible".
It is expected that a special summit may be held after Easter to deal with the appointment of a successor to Mr Jacques Santer, who last night declared his intention to run for election to the European Parliament.
However, the Berlin summit will establish a timetable for appointing a new president and, subsequently, a Commission.
Expressing the hope that Mr Santer's successor could be appointed "sooner rather than later", Mr Ahern said that "until that happens, we will not be discussing the make-up of the Commission".