Mr. Jim Deane:

I will deal with the BMW issue first. Basically there is a three year reference period to determine the category of a region. The GDP per capita is averaged against the other 271 regions within Europe. Currently, the BMW region is at about 93% of the EU average over the 2007 to 2009 reference period. In the original proposals, the reference period was 2006 to 2008. The reference period has been changed to reflect the latest data from 2007 to 2009. We are not sure, if the reference period was changed to 2008 to 2010, whether the BMW region would even meet the threshold because the calculations are relative. Any decrease would have to be relative to the rest of Europe. Basically, the problem for the BMW region is that in the current round, it is called a "phasing-in" or a "transition" region as it is moving from a less developed region to a more developed region and it will lose that status this time around. This is a constant feature of all of our negotiations with the EU Council and Commission. We feel that the BMW region, which has had a significant drop in real GDP and has significant unemployment issues, should be treated as a special case. We are working on mechanisms to try to maximise the draw down for the BMW region in this context.