Cut of £78m in EU reconciliation fund for North angers FF MEP

EU Commissioner for regional Affairs, Ms Monika Wulf Mathies, has expressed "deep regret" over a decision by the European Parliament's budget committee to propose a £78 million cut in the EU's special peace and reconciliation fund for Northern Ireland.

The move provoked an acrimonious dispute between Irish MEPs after the funding was reallocated to the EU's depressed steel and textile regions on a proposal from the Socialist group.

In dispute is whether the vote to reduce the allocation for 1997 from £125 million to £47 million - is simply a "book keeping measure" or one which will have a real effect on the overall commitment of £240 million over three years to the special fund established by the former Commission president, Mr Jacques Delors.

The move was denounced by the Fianna Fail MEP, Mr Pat "The Cope" Gallagher, who said that the package was "endangered" unless another source of funding could be discovered.

"It is an appalling decision that, when the peace process is facing its darkest hour, sends the worst possible signal. It indicates that Europe is divided in its practical commitment to the peace process and that the political will to provide adequate funding for peace is weak", he added.

He was particularly concerned at comments by the chairman of the budget committee which suggested that the Irish presidency was not fighting hardest on the issue.

Irish diplomatic sources expressed concern at the cut and said that the presidency would seek to restore the full budget line when the matter came back to ministers.

Ms Wulf Mathies said that the Commission had recommitted itself to the peace process and that to reduce the fund for 1997 "shows a lack of solidarity". Mr Gallagher was accused of playing politics with the issue by Labour's Mrs Bernie Malone, who pointed to a note attached to the budget which recommits the parliament to the full programme of £240 million.

The Fine Gael MEP, Mr Joe McCartin, the only Irish member of the budget committee, described the move as a "bookkeeping exercise" and said: "At no time has the European Parliament or its budget committee proposed a reduction in the total fund. I wish to assure all concerned that the European Parliament will provide every single, pound of the package.

A spokesman for the SDLP leader, Mr John Hume, said that he was not worried by the move, which was a standard part of the annual budget review and an attempt to make sure that the money would be there when it was actually needed.

The cut is part of a flexing of muscles by the parliament over the refusal of heads of government to agree to an increase in the overall EU budget. It was ostensibly made because there has been a slow take up of the fund in the first 18 months of its existence, a result of problems involved in setting in place the innovative and largely community based networks through which payments will be made. With those in place now, applications for funding are reported to be flooding in.

Under the EU's arcane budget procedure, the matter now goes to a full vote of the parliament on October 24th and then to conciliation between the parliament and the Council of Ministers, which shares budgetary authority under the co decision process.