BROWN AND THE EU

IT is now generally thought that Gordon Brown's judgement this summer on Britain's possible membership of the European single currency will be negative - at least for the moment. What has not been anticipated, however, is that Mr Brown plans also to seek Britain's withdrawal from one of the European Commission's major economic activities - its regional assistance programme. Under arrangements which have been in place for many years the Commission uses its central budget to provide financial assistance to regional development throughout the EU. Britain, for instance, receives £1.4 billion from the EU budget for such development but the decisions on which projects should benefit is made in Brussels, not London. Mr Brown wants to change this, arguing that decisions are better made locally and funded directly by national governments instead of by the Commission. Although there is logic in his view, it also has to be recognised that Mr Brown is anticipating a time when regional development aid will increasingly go to the new EU members from Eastern Europe. Spain, a major beneficiary of this aid in the past, has also expressed anxiety about this shift in the distribution of these funds. The EU's regional programme is its biggest activity after the Common Agricultural Programme and both of these are now under attack from some member coutries. Any significant change will take a long time but Mr Brown has signalled that he means to start on the regional programme during the impending negotiations on the EU's budget for the seven years from 2006.