Irish fury at EC aid cut

THE European Commission yesterday cut pounds 600m from the regional aid budget for Ireland after a row that left Dublin steaming with anger and the EC President, Jacques Delors, crying foul.

Only Bruce Millan, the Scottish-born Commissioner for Regional Affairs, was smiling after fending off Dublin's clumsy attempt to extract more money than was on offer.

The cash from the EC's regional funds for the poorest areas of Europe will be paid over six years. It is meant to compensate for the stiff competition of the single market and to bring the weaker economies into line with the rest of the EC in preparation for monetary union. Ireland has a good track record in using regional aid sensibly, but other EC countries often pocket the money or hand it out as a form of political patronage for sometimes dubious projects.

Dublin's attempt to get more regional aid was seen in Brussels as a brazen try-on that might have succeeded but for Mr Millan's resolve not to be bullied. And though never under direct threat, Britain's pounds 1.68bn share of the regional fund, earmarked for the Highlands and Islands of Scotland, Northern Ireland and Merseyside, was intact at the end of the day.

At the same time the Commission adamantly denied it had reneged on a deal by shortchanging Dublin. Mr Millan said: 'What we agreed in July was an indicative figure. I hope that the Irish government will be able to present the figures in a positive way, because they are good news for Ireland. If there has been a misunderstanding I regret it very much.'

The Commission argues that the undertakings it gave in July, when the issue of regional funding for the EC's poorest areas until the year 2000 was thrashed out, were only approximate figures. But Albert Reynolds, the Irish Prime Minister, had announced immediately that he had secured a promise of at least 7.8bn punts ( pounds 7.5bn) from Jacques Delors himself, and the sum was written into the five-year national development programme he presented to the parliament two weeks ago.

Mr Millan, who nearly came to blows with the EC President in the summer, when he tried to tell him there was not enough money available to meet everyone's expectations, was finally vindicated yesterday. Once all the calculations had been worked through, it was clear that the amount Ireland could realistically expect was closer to 7.2bn punts ( pounds 7bn), despite a personal appeal by the Irish Foreign Minister, Dick Spring, who dashed to Brussels on Wednesday night.

Yesterday the 17-strong Commission college voted to approve the allocations. Only the Irish, Greek and two Italian Commissioners voted against. Italy, too, has done less well than Rome had hoped but Greece, Spain, Portugal, Belgium, Germany, France, the Netherlands and Britain are broadly content with their share.

Mr Delors, too, insisted he had never promised more than to extract what he could for Ireland which, even on today's figures, receives more EC regional funding per head of population than anywhere else in the Community, although it is not the poorest in terms of national income.

Mr Millan promised that a 'review' halfway though the 1994-1999 programme would provide an opportunity to assess which countries were making the best use of the availaible funds and to redistribute some of the money between member states if necessary.

'Ireland is, of course, a very good performer,' said Mr Millan, hinting that extra funds could be available then.