7 DECEMBER 1991, Page 25

Compete? No, cohere

COHESION funds? You willl shortly be invited to subscribe to them. Well, not exactly invited. These are the funds that will be payable in European countries which would otherwise be losers from union — and the sky must be the limit. As the Delors report said, one currency is unlikely to fit a dozen different countries, all at different stages of growth and differ- ent points in the economic cycle. The report blithely concluded that they would all have to be made to fit the currency. The name for this process is social and econom- ic cohesion, and no one suggests that it is going to be cheap. The economists lain Begg and David Mayes, writing in the National Institute's review, sound what they evidently intend as a solemn warning: `Unless countervailing policies are imple- mented soon, disparities in the European Community are likely to widen rather than narrow in the 1990s. This will be a direct consequence of moves by the Community to accelerate economic integration.' The EEC's 'structural funds' are to be doubled, but Begg and Mayes still have doubts about them, and add: 'Their limited scale is also a problem.' So they call for a bigger budget, and a reshuffle of contributors, and guid- ance for countries which cannot consume enough money: 'It is clear that in the south of Italy, agreement among all the different interested parties is difficult to achieve.' So make them an offer they cannot refuse. 'If existing funds cannot he spent, it is difficult to sustain the argument that they should be increased. A positive attempt to increase absorption through administration and training would be the most obvious step.' This promises to be the biggest pork-barrel in European history, and the National Insti- tute makes it clear that Britain would have to keep filling it up. It bears out my obser- vation that if you like the Common Agricul- tural Policy, you'll love the Common Mon- etary Policy. There can be no doubt that the promise of a dip in the cohesion funds has been the quickest and surest way to buy votes at the Maastricht summit.