Irish negotiators in the stalled EU farm reform talks in Brussels last night welcomed what could be a major German concession on compensation payments.
Speaking in Bonn, the German Agriculture Minister, Mr Karl-Heinz Funke, appeared to concede that German attempts to force national governments to pick up part of the cost of farm compensation payments, so-called "co-financing", would not succeed.
The policy is anathema to Irish farmers, who regard it as a first step to re-nationalising the Common Agriculture Policy.
"I interpret the results of the last meeting as showing that in future there will be no talk of co-financing," Mr Funke told Reuters.
One Irish diplomat described his comments as "hugely important" in helping to narrow the chasm between Germany and France.
Mr Funke's retreat will come as a considerable relief to Ireland, whose diplomatic offensive on Agenda 2000 continued yesterday as the Taoiseach, Mr Ahern, met the Commission President, Mr Jacques Santer, and the Belgian Prime Minister, Mr Jean-Luc Dehaene.
The Taoiseach also met the Irish Commissioner, Mr Padraig Flynn, for a briefing on the talks. Mr Ahern said later they had discussed EU business and had not talked about the £50,000 which the property developer, Mr Tom Gilmartin, says he gave to Mr Flynn for Fianna Fail.
Mr Ahern, in combative form, insisted to Mr Santer and to reporters that he would stand by Ireland's proposals for regionalisation, Clare and Kerry included, describing them as essential to a fair and equitable settlement.
"I've no intention of changing our position," the Taoiseach said. "This was something we considered, and I have not heard any argument here or last week as to why I should change that . . . As far as any issue that Eurostat wants to put to us to change our positions, we'll certainly debate it."
He insisted that the Commission had been "supportive of our efforts without committing themselves", although a more cautious Mr Santer would only say that Eurostat was a "very independent" body whose director would meet the head of the Central Statistics Office on Monday.
But Mr Santer did give some comfort to Mr Ahern on issues related to Agenda 2000, insisting, for example, that the Commission stood by its proposals on cohesion funding, both in terms of a midterm review and the legal entitlement of euro participants to continued funding. On the demand by net contributing states for "stabilisation" of the EU's budget by 2006, Mr Santer distanced himself from the more extreme proposals, which would mean cuts of 14 per cent at a stroke in overall structural spending. He said such a prospect was simply "not realistic".
Mr Santer backed the formula based on maintaining 1999 spending in real terms and said he was "confident in the case of Ireland we can reach a very fair compromise".
The Taoiseach also supported the higher figure but said he understood the problems of those who wanted harsher cuts.
"From our point of view I have always accepted that the net contributors have a case," he said. "They wanted to see resources controlled in a way that will make possible enlargement later on, and we have been sympathetic to that cause."
Mr Ahern again stressed the bottom-line issues for Ireland: a reasonably soft landing on structural funds, continued cohesion support and a fair deal on milk and beef.
The farm talks resume tonight and are due to continue tomorrow.
Sources say significant progress has still to be made on milk and beef and that it now appears certain that French proposals for claw-backs in direct-aid payments to farmers will form part of any compromise.
Yesterday Mr Flynn and members of his cabinet went to the official residence of the Irish Ambassador to the EU, Mr Eamon Ryan, in Brussels, for discussion on the EU talks with the Taoiseach.
"He gave us a very in-depth and thorough analysis and very good advice," Mr Ahern said afterwards. "That took up all our time, and, insofar as other matters are concerned, I dealt with them comprehensively yesterday."
Mr Ahern said the only reference to the Gilmartin affair had been when he thanked the Commissioner for sending him a letter, read into the Dail record on Tuesday, in which Mr Flynn said he had been advised by tribunal representatives not to discuss the matter with anyone else.
"I thanked him for sending me that letter, because I was looking for it for some time. And that was it," Mr Ahern said.
The Tanaiste, Ms Harney, suggested yesterday that a cloud still remained over Mr Flynn.
But she said she accepted that the Commissioner had said he had been asked by the Flood tribunal not to make any public comment.
Fine Gael said its lawyers would seek a meeting with the Flood tribunal today, to ask what legal advice was given to Mr Flynn.
Dail Report: page 6; Flood tribunal: page 9
