‘Malta did not need EU fund as country had capital injection’ – PS Farrugia
Parliamentary Secretary Aaron Farrugia has insisted that the government did not need to make use of the European Fund for Strategic Investment (EFSI) in Gozo given that the country’s financial stability despite the crisis of 2008 meant a capital injection through loans was not necessary, maintaining that the 10% structural funds allocated to the island was more than enough.
Farrugia was approached by The Malta Independent after PN MEP candidate Peter Agius criticised the government for failing to capitalise on the EFSI saying that Malta placed second last from countries who made use of the currently 13 Billion Euro fund, using 12 million.
“The EU is offering us the tools to modernise Malta once again, to rise up to the challenge of an oversize population using an undersized infrastructure. The European Strategic Investment Funds could trigger a much more secure private participation for large scale projects in Malta such as an underground transport network or investments to strengthen port infrastructure. We cannot afford to be at the bottom of the graph on this,” Agius said.
He also insisted that Gozitan’s should be involved greater in its own decision making process especially given the issues facing youth employment in Gozo and the possibility of a permanent link.
The EFSI, Farrugia noted, was introduced to overcome the current investment gap in the EU by mobilising private financing for strategic investments, following the international financial crisis in 2008.
The fund does not provide grants but provides assistance using various financial instruments, in particular, European Investment Bank loans and guarantees.
“Our country did not need to use the fund, we did not massive problems after the financial crisis, and we did not have a cash flow issue or a lack of investment from both the public and private sector,” Farrugia said.
“One also needs to note that the fund is mostly used by private investors. The private sector in Malta felt it did not need to pursue certain loans as Maltese banks continued lending. Unfortunately, it is hard to find Maltese investors to pursue the fund as the EFSI is chiefly used for million euro large-scale projects,” he continued.
Asked to comment on Agius’ claims that the government failed to recognise Gozo’s autonomy and involve the island in the decisionmaking process behind the allocation of EU funds, Farrugia said:
“Positively, both the current and preceding administrations decided to allocate 10% of all structural funds to Gozo. This does not mean it just receives that 10 %, but that it is ring-fenced for use in Gozo.
“Over and above that citizens and entrepreneurs in Gozo can also make use of a number of funds, for example, the ECF, in the digital sector, in the aid of vulnerable persons.
“I believed that 10% is a lot, as a matter of fact, we are trying to see how Gozo will be able to absorb the entire 10% that is allocated.”