Ireland has enjoyed extraordinary economic success in recent years because of a series of complex and mutually-reinforcing policies. The State has moved from an era of fiscal profligacy to one of budget consolidation.

Our young population, once seen as a drain on resources due to increasing the dependency ratio, is now seen, with its high education standards, as a primary asset.

A quarter of a century of full and equal access to the rich markets of the EU, and strategic certainty on issues such as EMU, have led to unprecedented inflows of foreign direct investment. A high degree of political stability and policy continuity, irrespective of the political parties in power, has also contributed to creating the climate for success.

Added to these ingredients have been the EU structural and cohesion funds which, in the decade from 1989 to 1999, will have delivered a total of £9 billion. It is so large in scale as to be difficult to comprehend - it amounts to roughly £2,600 per person in the State. It is worth on average about 2.5 per cent of annual GDP and it is estimated by the ESRI to have added one percentage point to Ireland's long-term growth potential.

The compound effect of all these forces has been to propel the Irish economy on to a growth path unparalleled in the State's history, quickly surpassing the cut-off criterion for qualifying for maximum European regional and social aid.

For quite some time, in speeches to the European Parliament and elsewhere, European Commissioners have taken a pride in pointing to Irish success, correctly believing that European solidarity through structural funds has played a significant role in this regard.

But success carries a price. That price is that, progressively, we will be expected to carry our own future development burden from our own resources. Having mainlined on European funds for a generation, while no one is suggesting we should go cold turkey, the question now is what replacement therapy should we go on?

Agenda 2000, the European Commission's strategic plan for the years 2000-2006, sets out the prospect of Objective One in Transition as the method for Irish withdrawal.

To date, the entire State has been presented to Brussels consistently as a single region. Under the proposed transitional arrangement, a future funding package would begin generously, perhaps at a similar level to current funding, with successive slices disappearing over the years, until, eventually, the country is weaned off its funding dependency.

There is, however, a fly in the ointment.

A large slice of the country, the west, the midlands and the Border counties, according to Central Statistics Office data, has not only lagged behind Ireland's leading regions but, as of the last measure, still remains below 75 per cent of the EU average GDP per head, thus potentially still qualifying for full EU Objective One status.

These regions have a strong claim for preferment. In conjunction with Eurostat, the UK government recently established the case for Devon and Cornwall in the west country to become Objective One regions for future European funding. This was accomplished with strong accompanying statistical evidence.

In my opinion, if they operate on the basis of objective criteria and parity of reasoning, the European Commission cannot simply dismiss any Irish claims in this regard provided they are cleared in advance through Eurostat as being grounded in fact.

Given what is at stake, for Brussels sources to categorise such argument as mere statistical gymnastics is facile.

Such an initiative could see 13 counties qualify for maximum European funding, which begs the question what would happen to the remainder, including the large urban concentrations of unemployment in Dublin, Cork and Limerick?

Progress to date on Agenda 2000 has been slow, largely due to the upcoming German federal elections. When these are out of the way, Germany, the largest net contributor to the EU budget, will need to engage in a crash course of consultation and dialogue.

To date, structural and cohesion fund regulations have been founded on a high degree of objectivity, notwithstanding the attendant horse trading for budget shares. This propensity should hold. Consequently, for those parts of the Republic not potentially qualifying for full Objective One status, the State should argue for Objective One in Transition.

This is not simply a have your cake and eat it strategy. Fairness demands that lagging regions, such as the west, be treated without prejudice in a like manner to equivalent regions throughout the EU.

If the Commission chooses at this stage to propose that a certain purse has been earmarked for Ireland irrespective of the terms of the new regulations, then it makes the exercise of preparing such regulations, from an Irish point of view, something of a sham.

What eventually we get in funding terms should be the outcome of a considered process of policy-making and not an advance budget-driven diktat.

Whatever the outcome, it remains open to Dublin and Brussels to ensure a differentiated package which recognises, in addition to the general infrastructure gaps both in transport and environment between Ireland and Europe, that there are serious regional development problems within the State, and to act and plan accordingly.

This time around there is an additional strategic reason to mount a determined fight. The Commission proposes not merely to limit how much European money we may expect but also, under new state aid rules, how much of our own money we may spend, for example, on industrial aid.

Consequently, how the maps are drawn and what rules will apply are critical both to the future use of their money and our own on a scale which we have not experienced before.

The rational bottom line is to negotiate the package which maximises the overall flow of funds to the State, combined with the maximum degree of freedom in the pursuit of domestic industrial policy. Right now, it is too soon to definitively call the optimum judgment.

Pat Cox MEP is president of the European Liberal Group