Commission rings changes in `Agenda 2000'

In the new Europe, reports Katherine Butler, regional aid will increasingly go to newer member states - to Britain's cost

THE gloves will come off in Brussels on Wednesday when the European Commission proposes the details of its "Agenda 2000" reforms to regional and farm spending. European governments are counting the cost of admitting five former Soviet bloc countries and Cyprus early in the next century. The rationale for the reforms is that to expand these high-spending policies in their present form to the poor rural states of the east, would bankrupt the Union.

No government, least of all Britain's, wants to increase its contributions to the budget so the Commission has to steer expansion without breaching the existing spending limit (1.27 per cent of member states' GNP). This is the context for expected cuts in aid to regions across Europe.

Aid will be cut in regions which are now rich enough to stand on their own feet and concentrated on those who are not. A four- to six-year transition for the losers is built in.

Britain's complaint is that UK regions will shoulder the worst cuts because of the way poverty is measured. Government strategy is to warn that the cuts will wreck efforts to boost public support for Brussels. "This will harm perception of the EU at a critical time," said Arlene McCarthy, Labour spokeswoman on regional policy in the European Parliament.

Wednesday will mark the start of a lengthy negotiation which even commissioners privately say will be "a dogfight" with several member states and potentially Britain threatening to veto enlargement if they don't get a better deal. The government case will be based on national figures for income per head which show Britain is now fourth from the bottom of the EU poverty league table, doing better only than Greece, Spain and Portugal. But it will be hampered by 18 years of Tory refusal to co-operate with Brussels on any form of EU driven regional policy.