The EU's long standing support for the peace process in Northern Ireland has been best exemplified by its commitment to the International Fund for Ireland (IFI) since 1989 and the PEACE Programme since 1995. This commitment recognises the long-term nature of the peace process' objectives, which have been widely supported over the years by the European Parliament, Council and Commission.

Council Regulation 2236/2002/EC provides the current legal basis for the Community contributions for 2003 and 2004. Article 6 of that Regulation sets out the necessary elements for an assessment of the need for support beyond 2004, and its submission to the EC Budgetary Authority. This report and its annexes build on the 2001 Report on the International Fund for Ireland, and constitute the assessment required.

Since the 2001 Report, devolution has been suspended in Northern Ireland. The political and social situation of the region remains fragile and the continuing level of violence and division calls on the EU to sustain its efforts to promote peace and reconciliation in this part of the European Union.

Past European Commission reports have acknowledged the very positive contribution of the IFI's activities to peace and reconciliation in Northern Ireland and the Border Region of Ireland thereby fulfilling its objectives, namely to promote economic and social advance, and to encourage contact, dialogue and reconciliation between nationalists and unionists throughout Ireland.

The current round of EC Structural Funds Programmes (in particular the PEACE Programme), which are the major instruments to promote economic and social progress in the region, present new opportunities for the IFI. The priorities set by both IFI and EC Programmes complement each other. In particular, while the IFI targets mainly economically disadvantaged areas, the PEACE Programme targets a list of areas, groups and sectors identified as "most affected by the conflict". Similarly, the cross-community and/or cross-border dimension could become explicit selection criteria for all IFI programmes, as they now are for all PEACE priorities.

The ongoing strategic review of the IFI activities augurs well for a "repositioning" in favour of community-based activities with a strong reconciliation dimension. Although the methods and the financial scale of the IFI and EC Programmes remain quite different, it is expected that the ongoing strategic review will allow the IFI, together with its donors, to make progress along these lines.

The UK and Irish Prime Ministers requested an extension of the EC contributions to the IFI and a continuation of the PEACE Programme for two years (2005-2006). As reinforcing the solidarity between Member States and between their peoples is a core EU objective, it is important for the EU to remain committed to these objectives, alongside other international donors, and to renew its contribution to the IFI. In this context, the Commission believes that funding after 2004 should continue to be provided on the basis of the observations made in this report, which could be reflected either in the future Council Regulation on the EC contribution to the IFI, or through other appropriate means of co-operation between the Commission and the IFI.