The Government's belated consideration of a possible regional basis for the next round of EU structural funds bears all the marks of a disturbing absence of foresight and planning. Until the last couple of weeks the Government has been making the case that, while the rapid rise in output and incomes in recent years means the State no longer qualifies for Objective 1 treatment in the allocation of EU structural funds, we should be let down lightly, phasing out funding over the period of the next round, rather than cutting us off abruptly.
The case for such a gradual phasing out of these funds is a good one, for they are largely used to improve our infrastructure. Because of the speed with which our output and incomes have moved towards the EU average, there has inevitably been an infrastructural lag. Much of our infrastructure remains that of a relatively poor European country, whereas our living standards are well up to the European norm.
But now, someone has had the bright idea of abandoning this approach, which would have enabled projects throughout the State to benefit from a gradual reduction of Objective 1 funds during the first few years of the next decade, in favour of a regional approach which it is believed might yield a larger total sum, available, however, only to projects in the western and northern parts of the State.
Now, it is possible that this might leave the State as a whole a little better-off on a one-off basis, and if this policy had been well prepared, there might be something to say for it. However, produced in this ham-fisted way at the last moment, it seems more likely to raise a posse of political hares at home and perhaps damage our relations with the European Commission and other member-states.
The matter should have been addressed two years ago when a basis for a review of our policy on regionalisation for structural fund purposes emerged with the publication by the CSO in November 1996 of its first set of regional accounts, giving figures for 1991.
Writing in this column a week later I drew attention to the fact that this CSO publication noted that in 1995 Irish GDP per head had reached 95 per cent of the EU average (a figure subsequently amended to 92 per cent) - whereas Objective 1 status is, of course, confined to regions where GDP per head is below 75 per cent of the EU average. I went on to point out that these new data "raised the question as to whether it might now be timely to base our claim for (EU structural) funds on the needs of some of our poorer regions rather than, as has been the case hitherto, on those of the State as a whole".
In that article I argued that our GDP figures are distorted by multinational profits, which invalidate comparisons with other EU countries, and that, allowing for this distortion, it was at least possible that three of our regions could be held to qualify for Objective 1 treatment.
Moreover, updated data for 1993, published six months later, in June 1997, showed that output had grown more slowly in the west than the rest of the State and only fractionally faster in the midlands and Border areas, thus strengthening the possibility of retaining Objective 1 treatment for these three regions.
Furthermore, while the official data available in the middle of last year did not go beyond 1993, by the time of its publication in mid-1997 it was obvious that much of the rapid growth after 1993 had been concentrated in the Dublin region, and that the Border areas and midlands had been losing ground.
Thus, 18 months ago there was a firm basis available for a review of our policy of treating the State as one region for structural funds purposes. It must have been clear then that if such an exercise was to be successful steps would have to be taken during the latter part of last year and the current year. But nothing seems to have been done.
Regional income or output studies carried out by the Economic and Social Research Institute (1977 and 1983) and the CSO (1991-1995) have been largely based on county data, which the Department of Finance could have had extracted as a basis for policy decisions on a new structural funds approach.
It is far from certain that the regions as currently delineated are well-suited to this purpose. The inclusion of Louth in the Border region could prejudice the case for this area being accorded Objective 1 status. For in the 1960s and 1970s Louth was in the top six of Irish counties in terms of income per head.
Having reviewed, and if necessary modified, the conformation of the less-favoured regions of the north and west, steps should have been taken later in 1997 to establish in each of them, as well as in the other regions, administrative structures of the kind favoured by the European Commission. Had this been done, it would not have been quite so damagingly obvious that the present proposal is a last-minute attempt to extract some more money from Brussels.
Finally, the political fallout from this proposal to confine Objective 1 treatment to one half of the State would have been avoided if new structures had been established to ensure the substitution of an equal volume of domestic for EU funds in those parts of the State that were to lose access to EU resources.
All the many affected interest groups in these areas could have been reassured that they would not be adversely affected - and might be better funded out of the net increase in total national resources that this policy shift was designed to produce.
The need for a carefully planned approach must have been evident to any politician worth his or her salt. For every politician has had to face the constant misunderstandings about the EU funding process that have bedevilled this issue for the past 25 years.
It would be interesting to know why this policy shift was delayed. Were the governments of the day alerted to the significance of the data provided by the CSO two years ago and again in updated form 18 months ago - data which included a reminder that in the absence of a regional approach, our entitlement to further Objective 1 funds was at risk? If this was drawn to the attention of the present Government, why did it fail to act in good time to prepare the way for a radical change of policy? And, if it decided then not to change course, why the sudden reversal of such a decision now?