The Malta Independent on Sunday
EU funds: Cabinet shake-up could affect Malta’s negotiating power – Peter Agius
• ‘Government ‘closely following’ discussions in the EU Presidency to ensure final compromise would be in Malta’s best interest’ – PS
Issues of concern over Malta’s power in negotiations on its EU financial package for 2021-2027 raised by PN candidate Peter Agius were dismissed by the newly-appointed Parliamentary Secretary Stefan Zrinzo Azzopardi.
In comments to The Malta Independent on Sunday, EU veteran Agius expressed his preoccupation regarding the impact of the recent changes to the Cabinet when Malta continues its negotiations on its package of funds in the upcoming multiannual financial framework for 2021-2027.
But Zrinzo Azzopardi replied that the government is “closely following the technical and political discussions with the Presidency in order to ensure that the final compromise would be in Malta’s best interest.”
The main issue, Agius explained, is that while negotiations in Brussels on EU funding are at a crucial stage, the portfolio for EU funds is changing hands for the third time in three years.
He highlighted the fact that, in the next couple of months, it is highly likely that the EU budget negotiations – through which countries will have their EU funds allocated for the next seven years – will be concluded. There is a European Council meeting scheduled for March, with the possibility of a special meeting being called in February.
Just recently, a new Prime Minister (Robert Abela) was elected through a PL Leadership election. Following this, a new Cabinet was appointed. Agius pointed out that not only had there been a change in Malta’s head of government, but also in the Minister and Parliamentary Secretary responsible for EU funds. He stressed that his concern is over the degree – and the timing – of the changeover of not just one, but three of the key negotiating actors at this stage in the game.
Agius explained that the Cohesion Fund, which is one of the funds within the multiannual financial framework, is particularly important to Malta because, through this fund, major projects such as the gas pipeline, the Gozo tunnel and similar projects could be funded. However Malta’s take from this particular fund is set for a smaller allocation for the coming seven years than the past seven, he explained.
This EU budget is fundamental, and includes allocation per policy area. Cohesion funds, for example, would mean funding for roads, infrastructure projects, etc., and other areas such as agriculture, defence, and migration. “This is being negotiated right now and the Finnish Presidency put forward a document called ‘the Negotiation Box’, proposing the allocations in terms of how much overall funding each area would have”, said Agius.
“There was already a proposed cut of around 10 per cent in terms of the amount budgeted for the Cohesion Fund as a whole, so there will be fewer funds overall available. We need to pitch the case for Malta’s next stage of development, given the serious challenges to our infrastructure – be it roads, health services and/or utilities. We cannot accept a reduction in EU funds for Malta in this early stage of our EU membership. Many regions across the block retain favourable EU funding terms 40 years into EU accession.
“It will be harder to make the case for Malta in the current scenario with rule-of-law concerns and a total change of actors around the negotiating table,” Agius said.
He pointed out that, over the past 15 years, EU Funds had been directly responsible for most of our growth. He explained that the longterm budget presented by the Commission had moved public money to other areas from which Malta could benefit, but is not yet ready to tap into, including the digital transformation agenda and defence, where Malta still abstains from cooperating in civilian projects – including cyber security – which would be fruitful for the country.
“We made progress in terms of attracting companies with technology, but are not yet developing the technology on our shores. We need to make that transition and become the natural place in which to invest in terms of digital technology and not simply to attract people who already have the technology and who come to settle in Malta due to the good taxation rate. That is where EU funding for research and development can play a role. So far, we are at the very bottom of the graph when it comes to attracting R&D funding.”
“We need to make a quantum leap to tap into new EU funding chapters so far unexploited. In terms of defence, we did not enter the Permanent Structured Cooperation in Defence due to our neutrality clause, although other countries with such a clause still opted in. In this, they are also discussing projects that are not military related, including – for example – investment in protecting a country from cyber terrorism. But we opted out, and without much of a discussion,” Agius added
“We are an oversized population for an undersized infrastructure, and our situation calls for more EU funds on Infrastructure and other areas, not less. I do not question the willingness of the new Prime Minister, the EU Minister or the EU Funds Parliamentary Secretary personally, but I am just concerned that, given that the picture already does not look so good, all three have changed just a few weeks before they are expected in Brussels to negotiate the funding for our economy for the next seven years.
“It seems to me that the whole changeover was done with a local reading and has disregarded the critical point in time for Malta to continue to reap the benefits of EU membership,” Agius concluded.
The Malta Independent sent a number of questions to the new Parliamentary Secretary for EU Funds, Stefan Zrinzo Azzopardi. Asked whether he has any concerns regarding Malta’s upcoming funds allocation, given that there is concern with regard to the change in PM, EU Minister and Parliamentary Secretary, he said: “The position of Malta has always been that there must be a fair deal for each country in order to secure the effective finalisation of multi-annual financial framework negotiations. We feel that the Commission’s proposed level was a good starting point and we are closely following the technical and political discussions with the Presidency in order to ensure that the final compromise will be in Malta’s best interests.”
Asked whether he is worried about the overall reduction in the Cohesion Funds available for the EU states, Zrinzo Azzopardi said that Malta is a ‘Friends of Cohesion’ country “as we believe that cohesion funds have an important role to play in the realisation of the European project. One must appreciate the scenario we are in today, including the impact of Brexit on the size of the available funds for the post 2020 programming period. As was indicated earlier, it is critical that the compromise package reflects a good balance amongst competing objectives.”
As for whether he has any concerns regarding the upcoming Summit, he said it will be an opportunity for the Heads of States and Governments to give an added impetus to negotiations in order to reach a deal as soon as possible. “Although there remain differences between the positions taken by Member States thus far, it is important that the engagement continues so that we make notable progress towards the final compromise package.”
Zrinzo Azzopardi was also asked whether there has been – or will be – any changes in terms of the team (excluding the Minister and Parliamentary Secretary of course) working on obtaining EU funds for Malta. “You will appreciate that there are a number of people who have been working on this important dossier and I look forward to working with them and others – together with Minister Bartolo – in order for the Prime Minister to get the best possible deal for Malta.”