Batt O'Keeffe (Cork South Central, Fianna Fail)

The Minister for Finance apologises for not responding to this debate. Ireland will draw down its full entitlements under the Structural Funds for each region. This means that investments will continue to take place in both regions leading to further improvements in living standards. These large-scale co-financed investments have occurred in roads, water services, child care, enterprise, and in the other extensive range of areas involved. Enterprises, employees, parents and children, commuters and others have benefited as a result through, for example, expanded service availability, access to employment and improved transport infrastructure. The Minister emphasises that the results achieved with the resources from the Structural Funds have been good based on independent analysis. The update evaluation of the Community support framework completed by independent consultants states that an analysis of data on Ireland's relative performance within the EU in the broad infrastructural and socio-economic areas that are co-financed shows it to be above the EU performance economically. The analysis also states that, while the Border, midlands and west region has not yet converged with the southern and eastern region, it has converged with the EU average.

Agenda 2000 was the negotiation process on the European Union's financial perspectives from 2000 to 2006. That determined Ireland's allocation of €3.3 billion in Structural Funds for the current programme period of 2000 to 2006. Ireland's allocation of Structural Funds is governed by the regulations and an agreement between the Government and the European Commission known as the Community Support Framework for Ireland 2000-2006.

To prepare for the framework, the Government, with the agreement of the European Commission and the Statistical Office of the European Communities, made new regionalisation arrangements changing Ireland's single region status with the aim of retaining Objective One status for the greatest possible area and optimising Ireland's entitlement to Structural Funds for the period to the end of 2006. As the Deputy stated, the outcome was the designation of two regions for Structural Funds purposes.

The Border, midlands and west region, incorporating the existing regional authorities of Border, west and midlands areas, retained full Objective One status for the full period from 2000 to 2006 because its gross domestic product at the time was less than 75% of the EU average. The remaining five regional authorities of Dublin, mid-east, south-east, south-west and mid-west were grouped into the NUTS II southern and eastern region. That region qualified for phasing-out arrangements under Objective One because it was a region that had qualified for Objective One levels of funding under the previous planning period but that now had a GDP above 75% of the average.

Under the Community Support Framework for Ireland 2000-2006, the country was allocated €3.3 billion in Structural Funds for the period. Of that allocation, the BMW region qualified for Structural Funds of €1.4 billion, with the balance of €1.9 billion going to the southern and eastern region. Regionalisation has the effect of increasing the Structural Funds allocation to the BMW region and of allowing that region to receive EU co-funding of up to 75% for individual projects, whereas the southern and eastern region only receives EU co-funding of 50%. Where state aid applies, lower rates are applicable. It should be emphasised that the Structural Fund regulations do not permit the transfer of the overall allocation of Structural Funds between the BMW and the southern and eastern regions. No transfer of the resources has been sought by the Government, and no proposals for such action are being considered.

Under the Structural Fund regulations, expenditure on co-funded measures must be incurred before the end of December 2008 to be eligible for the drawdown of Structural Funds for the 2000 to 2006 programming period. Reports to the monitoring committees for each of the operational programmes for the period January 2000 to December 2005 indicated that expenditure on co-funded measures for each region is on target. Based on those reports, the Minister expects that both regions' entitlement to Structural Funds will be fully drawn down in line with the timetable set out in the regulations. In those circumstances the proposal outlined in the Deputy's motion is not expected to arise.

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