Stealing from poor counties to give to rich

The Border, Midlands and West region (BMW) was created at the end of the 90's to maximise funding under the last round of EU structural funds. By dividing the country in two and creating a completely new region at the top half of the country, the economic situation of the poorer counties was assessed separately to the other parts of Ireland. It therefore qualified for maximum amount of grant-aid from the EU over the 2000-2006 period.

But the rate of development has not kept pace with what was promised by Government in 2000. Brian Cowen, Minister for Finance, acknowledged the €660 million underspend in a recent debate in the Seanad and promised to increase spending over the remaining two years. This is in contrast to development that has taken place in the southern and eastern region where the cost of the roads programme alone has almost trebled from an initial forecast of €6.7 billion to a revised costing of €15.8 billion.

With EU funds to Ireland set to dry up after 2006, the Border, Midlands and West region will no longer be classified as "disadvantaged" and will not qualify for maximum EU aid even though its infrastructure is underdeveloped, its unemployment rate is higher than the national average and there are low numbers of company start up.

The accession of the ten new member states means that the prepondorance of EU funds will flow to the these areas. It is likely that Ireland will receive less than €1 billion of Structural Funds over the period 2007 to 2013, less than one-third of what was received under the 2000-2006 period.

The Border, Midlands and West region will be dealt a double blow because as its classification changes, so too do the rules governing the level of grant-aid it can offer potential investors. Up until now, the region could offer companies up to 55 percent of grant-aid as part of a package to attract them to set-up in the region. After 2006, this grant-aid rate will fall to 20 percent under the EU rules on State-aid.

"The Government has undermined its policy on the BMW region by underspending the funds it announced it would spent there", Senator Burke said during the Seanad debate. "This country has received considerable money from the EU on the back of the BMW region. It is disgraceful to think that the Government has neglected to spend a considerable proportion of that funding in recent years."

Hilary Curley