As impoverished as east Germany, Cornwall is poor man of Europe

CORNWALL, BEST known for providing idyllic seaside holidays, is now one of the poorest regions in Europe, and is as disadvantaged as parts of eastern Germany, according to European Union figures.

The statistics, which will be used by the European Commission as the yardstick for deciding where to direct regional development aid after 1999, indicate that four British regions have fallen into such decline and levels of high unemployment that they now qualify for priority European help.

Income per head in Cornwall, West Wales, Merseyside and South Yorkshire is at least 25 per cent below the EU average. In Cornwall, gross domestic product (GDP) per capita for the three years 1994 to 1996 was just 69.8 per cent of the EU average. The West Wales and Valleys region is only marginally better off on a GDP per head of 71 per cent of the EU average. Brussels uses 75 per cent of the average as the threshold for extreme regional poverty.

Assuming that the threshold will not be changed, all four regions now stand a good chance of being classified "objective one", or extremely disadvantaged, when billions of pounds in EU regional funds are shared out early next year.

For Cornwall, the Welsh valleys and South Yorkshire, the depressing figures, produced by Eurostat, the EU's statistical agency, are a cause for celebration. For the first time they will be entitled to top rates of funding from Europe but will also be allowed to offer industrial investors double the rate of start-up incentives permitted in other parts of the country,

Merseyside has enjoyed priority aid status since 1993 but GDP per capita is still only 72 per cent of the EU average.

Northern Ireland and the Scottish Highlands, by contrast, look likely to lose their claim on the highest rates of grants. The Eurostat figures show that income per head in Northern Ireland is more than 80 per cent of the EU average while in the Highlands and Islands the figure is 76.5 per cent.

Arlene McCarthy, Labour MEP and spokeswoman on regional policy, said Northern Ireland should be considered as a special case because of the peace process: "Clearly, cutting off `objective one' without replacing it with some other sort of special aid would not be in keeping with the EU's promise to support the peace process."

She predicted "substantial increases" in investment in the four poorest regions. For Cornwall, devastated by the crises in farming and fishing and the closure of tin mines, the additional sums could be pounds 350m. The county has been fighting for recognition as a poor region for several years but until now has been lumped with Devon, where incomes are significantly higher. Brussels finally agreed this summer to consider Cornwall as a separate region.

Overall, Britain - which is the fourth poorest member state - stands to lose hundreds of millions of pounds in EU funding following a proposed shake up in preparation for the admission of former Communist bloc countries.

Euro MPs called yesterday for a flexible interpretation of the funding rules so areas that are marginally above the regional poverty line can qualify for top rates of assistance.