Cash wrangle greets new Europe

A NEW ERA dawns across Western Europe today as the European Community is quietly subsumed by the European Union, without razzmatazz or fireworks. With it comes the promise of a better life for the Union's 340 million citizens, most of them deeply sceptical about their identity as Europeans.

In Britain, the Union has already got off to a bad start. Promised assistance worth pounds 329m in European grants will not be coming to 10 areas blighted by high unemployment and industrial decline, because the Government has decided not to match the funds pound for pound.

Instead, it has asked the European Commission to accept new plans on how the money should be spent, a move critics say is designed to get around the 'additionality and transparency' principles that prevent the European money replacing government spending.

Wayne David, Labour MEP for South Wales and vice-chairman of the European Parliament's Regional Affairs Committee, claims the Government is diverting money from elected local bodies towards quangos, over which it has more control. 'It is yet another attempt to emasculate local government,' he said, 'at a time when the trend in Europe is to transfer power and responsibility to the regions.'

The regions affected are: the North- east, which loses pounds 60m; eastern England, pounds 70m; West Midlands, pounds 38.2m; North- west England, pounds 76.6m; West Cumbria and Clwyd, pounds 13.3m; South Wales, pounds 45.6; western Scotland, pounds 8.8m; eastern Scotland pounds 3.92m; others, pounds 13m.

European Union, page 8

Leading article, page 13