EU funding likely to dominate talks between Bruton and Commission

EU funding for Ireland, the BSE crisis, and the transfer of the EU's veterinary inspectorate to Co Meath are likely to dominate discussions here today between the Taoiseach, Mr Bruton, and the European Commission.

Fears that a budget squeeze may jeopardise some of the funding needed to extend the £240 million EU special peace initiative in the North led to a recent Joint approach by the Irish and British ambassadors to the President of the Commission, Mr Jacques Santer. Their concern was to ensure that the funding of the initiative an extra £160 million is expected over the next two years is not taken from already promised structural funds. Mr Bruton is likely to echo this today.

He will also seek assurances that proposals to cut the EU contribution to the International Fund for Ireland are not going to be agreed. The fund received some £16 million last year, and sources say there are proposals to axe the donation.

The Taoiseach will also be anxious to sound out Commission views on the likely effects of the mid term review of structural funds, as well as discuss the timetable for establishing new guidelines for the next phase, which runs from 1999 to 2004.

Ireland's economic success will plush it out of the group of "cohesion" countries next time around. But there have been repeated assurances that this will not mean a complete cut off of funding, and the framing of the new guidelines will have a critical bearing on the sort of support the State can continue to expect.

The Irish Commissioner, Mr Padraig Flynn, is understood to be urging the Government to set out its strategic priorities quickly.

Mr Bruton's visit comes as the Commission is engaged in intensive discussions over the budget for next year. The Commission has taken to heart the financial stringency faced by many member states in the run up to the single currency, and has taken the political decision to curb its own spending increase to 3 per cent.

With the structural fund commitments due to rise by 8 per cent, the Commission is grappling with keeping all other budgets to a growth of only 0.5 per cent, a substantial cut in real terms.

That means shaving £2 billion off the agriculture budget. Half of this, the Commission is suggesting, should be in arable aid payments, which both the parliament and the Council of Ministers have yet to agree. The balance is likely to be found by setting more realistic budget targets the farm budget usually overestimates its needs.

Other budgets, including that of Mr Hynn's Social Fund, are likely to face serious cuts.

Mr Bruton is also due to meet the Consumer Affairs Commissioner, Ms Emma Bonino, who is now responsible for food safety, and the Farm Commissioner, Mr, Franz Fischler.

Mr Bruton will be interested to hear what plans Ms Bonino has for what is now expected to be the expanded veterinary inspectorate, due to transfer to Grange, Co Meath. She is likely to want to know, what is being done to find premises for the inspectors while the Grange centre is built.