Mr. Jim Deane:

In simple terms, that is the understanding, but as I stated previously and as mentioned by Mr. Vincent Landers, after the MFF is agreed its aspects must be brought into the negotiations on the various regulations. The cohesion legislative package is one of those. When the decision on macro-economic conditionality is made at the Council meeting next week, we must reflect it in our cohesion regulations, which apply to the European Regional Development Fund, the European Social Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. We are trying to mitigate the chances of being sanctioned. If a member state has a procedure taken against it in regard to macro-economic conditionality or its fiscal discipline, the Commission will request that member state to take effective action to address the problem. It is only where the member state consistently fails to take that action that such a suspension could actually be invoked. It would be a suspension of funding until such time as the member state could actually take action. The provision already exists under current regulations in regard to the Cohesion Fund itself. The suspension has only been threatened once, in the case of Hungary.

We want to include language such as "proportionate", "equality of treatment" and "practical". Only at the end of a long, drawn-out procedure should be an impact on the member state. We believe the mechanism should apply only if the State wilfully ignored the Commission's recommendations on how it should address its problems. Ireland, having followed a programme of assistance and having met all its targets in that regard, would not expect the facility to be used against it.