Adjournment Matters. - Funding for Southern Border Counties.

I welcome the Minister of State at the Department of Finance, Deputy Coveney, to the House. This gives me an opportunity to speak on this important issue.

I have been involved in cross-Border work for 19 years and I am aware of the different fundings which are available and of the statements made by the President of the United States and the delegations from America who are trying to help the North and the southern Border counties. I know that the International Fund for Ireland is divided on a 25:75 basis and that the Delors package is divided on a 80:20 basis.

The southern Border counties are in danger of losing out because the national development plan, which was drawn up before the ceasefire in the North, includes little funding for them on the grounds that they receive INTERREG funding. The INTERREG programme has been widened to include harbours, but it is of little value to the Border counties. The Government is using INTERREG funding as a substitute for other funding and that is unacceptable to members of local authorities in Donegal and the other Border counties.

I was at a meeting in Donegal on 27 October last when the Taoiseach said there would be no additional funding because it was important that Exchequer funds meet the Maastricht criteria. Since then the Minister for Finance made a different statement in Monaghan. He realised that the Taoiseach's statement of the 27 October in Letterkenny had been seen by the Commissioner for Regional Development and had not gone down too well because the funding from Europe and elsewhere has been allocated purely on the basis of additionality.

I sought this matter on the Adjournment in order to clarify this question because the people of the Border counties of every political persuasion are aware of the current situation and the chickens will come home to roost pretty quickly. For example, County Donegal was allocated £2 million for roads in 1995, but it lost £2 million because the normal allocation for roads was reduced by that amount. The Government cannot continue to do this in the hope that it will not have serious consequences for the Border counties.

We have now reached the stage where setting up a business in any of the southern Border counties is a totally unattractive proposition. It hurts me to say this because I may help to spread the bad news. Throughout the 25 years of hostilities in the North, the British Government paid compensation on the spot for all the deprivation which had taken place. Belfast is now the focus of the International Fund for Ireland, the Delors package and the peace and reconciliation fund and related announcements are made in Belfast.

Even at the Washington Conference, which was attended by huge numbers of northern local authority members, Baroness Denton, representing the British Government, said that she appreciated the work and contribution of the American people, the US Government and President and called on the gathering to give a round of applause. About 90 per cent of the people present were from the North and they stood and applauded in appreciation for the funding which was coming to the North. We had a Minister there too but he did not stand and say that we in the southern Border counties also appreciate what the American people and the President have done for the southern Border counties. This is consistent with the lack of awareness of the needs and deprivation in the southern Border counties over the last 25 years.

Look at the record of American companies and of those setting up businesses. The six Border counties account for about 11 per cent of start-ups. At present, it is much more attractive to set up in Northern Ireland. If a derelict site is classified as a bombed site there, one can get a start-up grant of £50,000. There are no such benefits or schemes here and we have nothing on the ground that works. I am involved in a county enterprise board which must submit to the Department of Finance even a small grant of £1,500 along with a tax-clearance certificate. How long would it take to get £1,500 on the dole? A few weeks, and one would not need a tax-clearance certificate, etc.

The situation is serious. I do not understand why the Government does not recognise that there is no point expecting funding from the Delors package, the fund for peace and reconciliation or anywhere else if matching funding is not put in place. The Minister for Finance said in Monaghan there would be additionality. Can the Minister present say that there will be additionality and that there will not be substitution, because that is what this is all about?

I met the Commissioner for Regional Development, Ms Wulf-Mathies, on three occasions and she said that my problem was not with her but with the Minister for Finance and the Government. She said that the Government would have to re-examine the national development plan and reallocate funds for the southern Border counties. She was quite open about it. She even said that there was a lot of "ring-fencing" going on. This is a new word which she had learned from Irish politicians. Will the Minister recognise that there is a serious problem?

According to a letter from the then Taoiseach, Mr. Charles Haughey, it was agreed at a meeting of the Anglo-Irish Intergovernmental Conference on 21 October 1987:

Both Governments have decided to press ahead with this [cross-Border] study because they recognise that the problems of the area are enormous and cannot be effectively tackled by either Government acting in isolation.

In another letter in response to my request for funding on behalf of the cross-Border group on 20 August 1985, the then Minister for Foreign Affairs, Deputy Peter Barry, stated:

This lack of financial additionality is a major drawback from the Government's point of view in so far as an integrated operation is concerned. It could in practice lead to a situation where the existing receipts from Structural Funds would be over concentrated on certain areas at the expense of broader national development priorities.

The Senator has run two minutes over his allotted time.

I am sorry because I have a lot to say and would like to continue.

I wrote to the President of the European Commission, Mr. Jacques Santer, to tell him that at a meeting in Letterkenny, County Donegal, the Taoiseach, Deputy John Bruton, to our great shock "advised the Group that there would be no additionalities from EU funding. This means that hundreds of applications under the INTERREG II Provision will be of no benefit to the border counties — the same applies to the Cohesion Fund".

We have a problem. I am just one of a number of public representatives who have met the Secretary of State for Northern Ireland, Northern ministers and, as I said, the Commissioner for Regional Development on three occasions. There is a lack of intent here and I ask the Government, the Minister for Finance or someone within the structure of administration here to demonstrate clearly that it is intended to make matching funds available on the ground. Sadly, I do not believe there is such an intent at present.

The local authority of which I am a member and the other Border counties have spent a lot of money employing consultants to put detailed plans together and to submit them to Government. We await its response. Will funding be made available for the Border counties? I must put it as bluntly as that.

I compliment the Senator on the way he has put his case. In addition to expenditure under the Community Support Framework operational programmes and from the Community initiatives, the Border region, comprising the six counties of Cavan, Donegal, Leitrim, Louth, Monaghan and Sligo, is benefiting specifically from the Programme for Peace and Reconciliation in Northern Ireland and the Border Counties and the Ireland — Northern Ireland INTERREG Programme 1994-99.

Under the peace programme a total of ECU300 million — approximately £240 million — of EU funds is being provided over the period 1995-97. At least 20 per cent of these funds amounting to approximately £48 million is being made available for the six Border counties. Under INTERREG II a total of £125 million of EU funds has been allocated to the Border counties and Northern Ireland for cross-Border projects in infrastructure, environmental protection, natural resources, human resources and economic development. Of this amount £72 million, significantly over half of the EU funding approved, has been made available for the six Border counties and, as in the case of the peace programme, where matching funding is required it will be provided by central Government.

Expenditure under the peace programme and INTERREG II will be additional to spending in the Border counties under the 1994-99 CSF operational programmes for Ireland and under other Community initiatives. In order to verify this additionality the Department of Finance has requested Departments to compile details of forecast expenditure under each operational programme and community initiatives for each of the eight regions. These forecasts, which are now being finalised, will provide the baseline reference data for establishing additionality of expenditure under the INTERREG II and the peace programme over the period of these programmes. I can assure the Senator that procedures are being put in place to ensure that additionality of funding under INTERREG II and the peace programme will be verifiable and transparent.

In the context of the peace programme the Department of Finance has asked Departments responsible for CSF operational programmes to examine the possibilities for refocusing these programmes in order to accommodate the new demands and challenges which have arisen following the cessation of violence. While a major recasting of operational programmes should not prove necessary, Departments are expected to examine possibilities such as advancing the timing of projects located within the Border region and increased opportunities for cross-Border co-operation.

The programme is very much a bottom-up programme and every effort is being made to ensure that local groups have the maximum input into the delivery of the programme. The bulk of the programme will be delivered by intermediary bodies funded by way of global grant. The programme was agreed with the Commission last summer and global grant agreement with the various intermediary bodies is now finalised. Applications already received are at present undergoing assessment and funds are expected to flow shortly.

Approval of applications under the INTERREG II programme has already commenced. I would remind the Senator that an INTERREG office was established in Monaghan last October and an INTERREG development officer has been appointed with the specific remit of assisting with the promotion of this programme on the ground both in the Border counties and in Northern Ireland. He will also inform interested groups and individuals on other sources of EU funding for their particular projects.

I thank the Minister for his reply which, although short, is frank and more encouraging than any I have received so far.