The European Commission has pledged to open membership talks with six more states, signalling an end to Ireland's £1 billion a year Structural Fund subsidies. But Ireland will continue to receive substantial EU funding well into the next millennium.
The Commission yesterday named five states - Poland, Hungary, the Czech Republic, Slovenia and Estonia - as eligible for accession talks from early next year. Cyprus has already been promised a place at the talks.
Five others - Slovakia, Lithuania, Latvia, Bulgaria and Romania - will remain in the queue.
The Commission President, Mr Jacques Santer, yesterday unveiled a 1,200-page programme, Agenda 2000, outlining plans for enlargement and radical reform of EU structural and farm funding.
The Taoiseach has welcomed the proposals, but warned that Ireland still needs substantial aid.
"We welcome the fact that the principle of no abrupt withdrawal of funding is accepted by the Commission and look forward to this being reflected throughout the next funding period," Mr Ahern said.
Mr Santer described the programme as a new "Marshall Plan" for eastern Europe, involving the commitment of some £55 billion in aid to the former Stalinist states over seven years.
But in a damning admission of the failure of the Amsterdam summit to reform EU structures, he called for two further treaty changing summits before enlargement to make the necessary changes.
The commitment to enlargement, combined with Ireland's own economic success, is likely to mean a fall in Irish grant allocation to less than half its current level by the end of the next budget period in 2006.
The Irish Commissioner, Mr Padraig Flynn, stressed that this was "not a loss by negotiation."
"It is a consequence of our success," he told The Irish Times. "We are a hard currency area and we have to live by the rules."
He said it was impossible to guess how much aid Ireland would lose, because a lot of the data on which this would be based had not yet become available. Even today, he said, we are above the eligibility limit for aid to poorer regions - 75 per cent of average European GDP.
"There will be a generous phasing out," he said. "It has not yet been decided whether the whole country will receive the end of Objective One" (qualifying for the top level of funding).
In his statement the Taoiseach said that the Government aim "will be to ensure the best possible outcome for Ireland and to maximise receipts in the next funding round."
He also insisted that CAP reform must preserve its fundamental principles and take the interests of all member-states into account in a balanced way. He said that Ireland was committed to the process of further enlargement, which was in the interests of Europe as a whole.
The Irish Farmers' Association warned that its members would lose significantly though the proposed reform. Failure to compensate farmers adequately for price cuts would mean losses of £80 million to the beef sector and £19 million to cereal farmers, its president, Mr John Donnelly, claimed.
However, IBEC welcomed the proposals, stressing that the cuts in aid were a result of economic success. It called for a Government investment plan to take account of the fall in subsidies.
The cuts may, however, pose more than economic problems for the Government. Ratification of the Amsterdam Treaty by referendum is required and polling is likely to be early in the new year.
The Minister for Finance, Mr McCreevy, has already signalled that the Government may be tempted to use the timing of ratification as leverage for a better deal. The reduced allocation may increase Euro-scepticism in Ireland and make ratification less certain.
Mr Santer was asked if the assumption of a growth rate of 2.5 per cent to pay for the bulk of the costs of enlargement was not overoptimistic, and if more cuts would have to be made instead.
He replied: "We will have to examine the situation. But the working hypothesis is realistic."