`Good-works' schemes put on hold after court decision

In a move that is certain to cause the British presidency acute political embarrassment, the European Commission yesterday closed down around 40 small funding programmes. They range from aid to non-governmental organisations to networks for the disabled and elderly. The Budget Commissioner, Mr Erki Liikanen, argued that a recent decision of the European Court of Justice (ECJ) in upholding a complaint from Britain and Germany meant that many programmes were now potentially illegal. The Commission decided to suspend all the programmes with the promise that those found subsequently to be legal would be reactivated.

The Social Affairs Commissioner, Mr Padraig Flynn, argued that the Commission was taking a far too restrictive interpretation of the ruling that would inevitably lead it into unnecessary conflict with the Parliament, the budgetary authority.

The result is that organisations like the Anti-Poverty Network, the alliance for the homeless Feansta, the European Federation for the Welfare of the Elderly, and the Disability Alliance are likely to face immediate cash crises. Commission sources say they do not expect some of them to survive long enough to avail of new opportunities provided for some of them in the as-yet-unratified Amsterdam Treaty.

Yesterday the Commission tried unsuccessfully to suppress the preliminary list of 41 programmes affected (almost double that number are expected eventually to be hit), arguing that for many groups the funding would resume once a legal review is complete.

Among the external programmes threatened are the £5.6 million anti-personnel demining programme, the £73 million human rights and democracy programmes, and £160 million in support for Thirld World NGOs' work.

The ECJ case had been taken by the last British Tory Government in a bid to block Commission spending on anti-poverty programmes. To the surprise of many, Labour allowed the case to continue and the court ruled in May that only "non-significant" spending by the Commission was permissible unless a specific legal provision in the treaty could be cited for the spending.