Northern Ireland to get pounds 150m from Europe

AN EARLY Christmas gift of up to pounds 150m in new funds to help the Northern Ireland economy is expected from the European Union.

EU foreign ministers heard the European Commission's presentation on a new package yesterday. Dick Spring, the Irish Republic's foreign minister, said the funds, due next month, would be 'substantial and additional' to what the EU already spends. Douglas Hurd, the Foreign Secretary, said Jacques Delors, President of the Commission, 'was wholly supportive'.

Northern Ireland is already to receive pounds 900m of structural funds over six years as one of Europe's poorest regions, plus cash for regional co-operation between the North and the Republic. The EU has also decided to increase its contribution to the International Fund for Ireland, taking it to pounds 45m over three years. If, however, the ceasefire holds and a lasting peace seems set, the EU intends to commit new money.

This would have several aims, say British and Irish officials: to help the integration of the divided economy, rebuild shattered urban areas, improve communications, boost training and education and lift tourism. Mr Hurd was at pains to play down suggestions that it would be used to destroy the peace lines between the two communities, saying this was a matter for Sir Patrick Mayhew, Secretary of State for Northern Ireland, and the Belfast authorities.

Both sides refused to discuss a figure, emphasising that it was more important to build the programmes first and attach cash later. However, the figure at which the British and Irish are aiming is understood to be about pounds 150m over five years.

At the moment the Commission is talking about pounds 10m- pounds 15m a year, according to diplomats, who say that the larger figure is 'an ambition'. They emphasise the difficulties in finding new cash, given the pressures on the EU's budget from farm spending, eastern Europe and other sources, but they recall that Portugal won a larger sum for its textile industry as the price of signing up for the Gatt deal.

The United Kingdom and the Irish Republic point to different objectives for the cash, for political reasons. The UK highlights urban regeneration, to benefit the citizens of Belfast and Londonderry, and people from both communities. The Irish Republic points to linkages between the two economies, which one study says could increase north-south trade by 400 per cent. One possible project is a new university - officials say the EU would want a high-profile gesture 'with a European flag' on it.

British officials concede privately that the cash could help to cushion the economic impact of a reduction in the military and security presence. Peace would bring an economic upturn as new investment boosted employment, but there would be a short-term economic loss, they say.

There is concern that the issue should be handled sensitively, partly because nobody wants the package to be a let-down. But there is also concern that if the project is seen as the integration of Ireland by the EU, it could be discredited in the eyes of Unionists.