It is another Irish solution to an Irish problem. Since our new-found wealth threatens our "take" from EU structural funds, the Cabinet yesterday approved a radical regionalisation, which divides the State into two economic regions. In all, some 15 counties, in the west, the midlands and the border areas will apply for retention of Objective One status which allows them to draw down the maximum level of EU funding. In recent days, after the intervention of the indefatigable TD for Kerry South, Mr Jackie Healy-Rae, and Ms Sile de Valera, counties Kerry and Clare have been hurriedly - if none too convincingly - included among the "poorer" counties.
The irony is that the regionalisation is not without some benefits. It will provide an opportunity to redress our overly-centralised system of administration and, at last, give some real powers and responsibilities to regional bodies. It should mean that power is no longer concentrated in Merrion Street. Regionalisation will also place a fresh onus on government to frame a coherent policy on poverty and marginalisation in our urban areas without creating or tailoring projects in order to maximise EU support. It should also, as the IDA has noted, help to attract inward investment to those counties in the west, the midlands and the border areas which might otherwise lose out. Critically, all of these counties will be able to provide a maximum level of State aids to industry, if the Government's application is approved. And it keeps open the possibility of continued EU assistance on a transition basis for the poorer region even after the next round of funding expires in 2006.
In its statement last night, the Government set out a strong case in favour of dividing the State in two economic regions. But this should not blind us to what is really driving the debate. This State has become a late convert to the benefits of regionalisation for one reason only: it allows us to squeeze the maximum amount of funding from Brussels. The charge levelled by Mr Michael Noonan of Fine Gael that it all amounts to an exercise in "political cuteness" is not without some substance. It remains to be seen how the Government's new-found commitment to local democracy will play in Brussels. The EU Regional Commissioner, Ms Monika Wulf-Mathies, has already expressed her concern about so-called "subsidy-shopping" in which national governments manoeuvre to maximise their take from the EU. But, on balance, it appears that the Commission's independent statistical service, Eurostat, will allow those 13 counties originally designated as poorer regions to retain Objective One status and the maximum level of EU funding. The fate of Kerry and Clare, where income levels are reportedly higher, is less certain.
The long-term impact of the Government's new-found commitment to local democracy in Brussels is more difficult to gauge. The hope is that the manoeuvring over regionalisation will not damage our store of goodwill. But the Government has embarked on a high-risk strategy and there are few guarantees.