The Government seems set to shift to a policy of regionalisation in its application for the next tranche of European Structural and Cohesion Funds.
The controversial decision, aimed at enabling 13 disadvantaged counties to secure special Objective One status with maximum European funding and industrial grants from year 2000 to 2006, will be taken by the Cabinet in the "very near future, possibly even next week", according to a Government source.
The change in policy, strongly signalled by Government sources yesterday, would involve dividing the State - which has been presented as a single economic unit for European funding to date - into separate administrative regions. The west, the Border counties and the midlands would gain from such a decision.
The difficulty involved in shifting to a regionalisation policy was indicated by the EU Regional Affairs Commissioner, Ms WulfMathies, in an interview on RTE yesterday when she outlined her opposition to what she called "subsidy-shopping" - the altering of structures to increase allocations.
The Commissioner told RTE's Mr Tommie Gorman: "We don't like member-states to try to change structures in order to go subsidy shopping. If structures are being changed, they have to be based on strong grounds, for instance on devolution . . . and they have to be comparable to the structures that are already in place."
She hoped that decisions on structural funds would be taken in March.
A Government spokesman said, in response, that there was no question of subsidy-shopping on its part. The concentration on the least well-off regions was a cornerstone of the Commission's own Agenda 2000 proposals and also formed part of the Government's undertakings in its Government programme.
Indicating a major shift in policy, the Government spokesman added that Ireland already possessed a well-established regional structure in the form of its local and regional authorities and other bodies. Giving greater focus to such bodies was already part of the Government's strategy.
Though Commissioner WulfMathies denied that any contacts, "formal or informal", had taken place on the issue, the Government spokesman said that informal contacts had taken place with the Commission, including its statistical office, EUROSTAT, to explore the manner in which new regional divisions in Ireland might compare with the rest of Europe.
A formal application had not been lodged, according to the spokesman, "but suffice to say that numerous common characteristics have been found to exist between possible new regions in Ireland and other regions in Europe at a similar level".
Economic studies commissioned by the Government have shown that areas towards the west, the Border counties and the midlands would fall within the income limit of 75 per cent of GNP, to qualify them for full Objective One status under the next tranche of European funds. There was a chance that, after that, they would continue to benefit economically through a transitional arrangement to Objective Two status.
The implications of such a policy, however, would deprive the remaining 13 counties, including the Dublin, Cork and Limerick regions which have benefitted most from the "Celtic Tiger", of a transitional arrangement where Objective One status would be gradually phased out during the lifetime of the new structural funds.
The pursuit of a regionalisation policy could require the Government to devolve stronger powers to regional bodies.
The leader of Democratic Left, Mr De Rossa, welcomed the clear indication from Commissioner Wulf-Mathies last night that the EU would not look favourably on any attempt by the Government to divide this country into separate regions simply to qualify for the next round of funding.
"It is now clear that if the Government proceed with its reported intention to seek Objective One status for 13 midland and western counties only, it would not only discriminate against communities living in areas of poverty and deprivation in cities ...but it could also result in Ireland getting a lower overall amount" Mr De Rossa added.
