Ireland threatens to use its veto

DUBLIN - A fierce clash between the main recipients of structural funds and the European Community is expected today when EC foreign ministers face decisions on the share-out of the aid package agreed at the Edinburgh summit in December, writes Alan Murdoch.

Ireland has threatened to use its veto over the final package if its allocation is cut back sharply. Other less-developed countries, including Portugal and Spain, are pressing for larger shares.

Sensing intense pressure to rein back on the share of aid won by Ireland, the Prime Minister, Albert Reynolds, has written to Jacques Delors, the European Commission president, advising him of this week's formal decision by the Irish cabinet not to accept less than the funding agreed at Edinburgh. As Ireland qualified for high assistance under key unemployment and regional disadvantage criteria, the EC's planned doubling of aid for the four cohesion fund recipients - Ireland, Portugal, Greece and Spain - would, if Dublin keeps its overall share, have yielded it almost Ir pounds 8bn.

January's 10 per cent devaluation of the punt lifted this to Ir pounds 8.6bn. Despite having just 1 per cent of the EC population, Ireland receives 13.5 per cent of structural funds. Dublin is said to have warned EC partners against backing away from its Edinburgh commitments, pointing out that last summer's Maastricht approval referendum was won almost exclusively on the amount of likely structural fund aid.

Ireland's budget strategy and its industrial sector's chances of competing in the single market are also linked to EC aid to secure vital improvements to infrastructure.