Dublin triggers EC crisis over regional funds

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The Independent Online
IRELAND plunged the European Community into crisis at the weekend by refusing, after 17 hours of negotiations, to agree a deal on the 1994-1999 distribution of EC funds for regional development worth pounds 113bn.

Dublin complained that the proposed division of EC spoils broke with assurances that the new funding scheme would guarantee Ireland at least the same proportion of Community aid as it now receives - a sum the Irish government works out to be pounds 8bn, and which the Prime Minister, Albert Reynolds, has already promised the electorate.

The Irish Foreign Minister, Dick Spring, said: 'We were looking for assurances . . . that were not forthcoming so in the national interest we had no choice.' Willy Claes, the Belgian Foreign Minister, who chaired the meeting, urged Dublin to reconsider. 'If we don't take a decision this month we will lose at least six months,' he warned.

Spain refused to sign any deal that met the Irish demands. Madrid has consistently argued that the funding arrangements must be better balanced.

Spain, Ireland, Greece and Portugal, as the EC's poorest members, get the bulk of regional development money, but for historic reasons Ireland gets more money per head of population than the other three. Spain believes it is entitled to at least pounds 32bn, and although the others have been less keen to publicise their demands it is clear there is not enough to go round.

'We need to show good sense, statistics aren't everything and it is important that we don't build disparities into the system and upset the competitive balance,' said Jacques Delors, the EC Commission President.

The fight is over the division of the largest amount of regional aid in EC history - a sum that by 1999 will consitute 35 per cent of the total Community budget.

Friday's meeting augured ill from the start: at least half the members had specific complaints about the proposed distribution and talks moved painfully slowly as the Belgian presidency drafted compromises that were ripped apart.

At 4am on Saturday, with Mr Claes due to walk his daughter up the aisle later that day, the meeting broke up.

The stalemate blocks a potential pounds 4.8bn for Britain. For the first time, the Commission has proposed that Merseyside and the Highlands and Islands qualify for help as hardship regions.

Britain, Germany, France and the Netherlands have also taken issue with aspects of the deal.

The problems must be resolved by next week or the development package that should be in place by 1 Janaury 1994 risks running into the sand. The European Parliament must rubber- stamp any deal during its July session. If it cannot, it will, by the next session, have enhanced powers to subject the accord to prolonged scrutiny.