EU Funds: Vari­ables affe dif­fer­ent now than in 201

The Malta Independent on Sunday - - NEWS -

How im­por­tant are EU funds for Malta?

They are im­por­tant for ev­ery coun­try and help namely in two spheres: the first of which is solid in­fra­struc­ture, through the Euro­pean Re­gional De­vel­op­ment Fund, and the sec­ond is soft in­vest­ment such as train­ing, schol­ar­ships, em­ploy­ment, reskilling and up-skilling. The eco­nomic growth achieved by this gov­ern­ment and those be­fore it is not only thanks to good prac­tice and the cre­ation of cer­tain niche mar­kets, but also thanks to EU funds.

I also think that, thanks to these EU funds, the cit­i­zens of Malta and Gozo, un­like in other coun­tries, feel as if they are part of the Euro­pean project. This is be­cause wher­ever they go they can see the prod­uct of these funds – be it in roads, re-skilling, the tablets that their child uses at school, train­ing given to nurses and doc­tors, MUZA, the Grand Mas­ter’s Palace: ev­ery in­dus­try and port­fo­lio has taken ad­van­tage of EU funds.

Small and medium-sized en­ter­prises (SMEs), for in­stance, have re­ceived €50 mil­lion in sup­port whilst there has also been in­vest­ment in im­prov­ing the Ta’ Qali and Xewk­ija in­dus­trial parks. These are all projects through which work­ers, those look­ing for work and those want­ing to in­crease their skills find EU funds back­ing them. EU funds have changed the face of Malta and I think Mal­tese and Goz­i­tans feel more Euro­pean – which is a feel­ing un­der threat in other EU coun­tries – not just in terms of val­ues and prin­ci­ples but also through their con­nec­tion to the work that is sup­ported by EU funds.

How much fund­ing did Malta re­ceive from the EU in the last EU Bud­get?

The EU Bud­get – known as the Mul­tian­nual Fi­nan­cial Frame­work (MFF) – is cal­cu­lated ev­ery seven years. At the mo­ment, we are in the cy­cle that runs from 2014 to 2020. In 2021, a new cy­cle will start which will then run to 2027. In early 2013, Lawrence Gonzi and his team man­aged to ac­quire around €1 bil­lion. The cir­cum­stances at the time when the MFF was last drawn up were, of course, dif­fer­ent than they are now: there was no Brexit, for in­stance, and there were dif­fer­ent pri­or­i­ties, so it is dif­fi­cult to com­pare the sit­u­a­tion then to as it is now be­cause it is not like-with-like. Back then, Brexit, for in­stance, was not on the cards. How­ever, as Bri­tain was the EU’s sec­ond largest con­trib­u­tor, the EU is now go­ing to be left with a €13 bil­lion an­nual vac­uum.

How much fund­ing are you an­tic­i­pat­ing that Malta will re­ceive in the next cy­cle?

That is an an­swer I can­not give you, be­cause we are still in ne­go­ti­a­tions. So far, the Euro­pean Com­mis­sion has put for­ward its pro­pos­als for the funds based on a for­mula called the ‘Ber­lin Method’. This method takes the GDP per capita of each coun­try and com­pares it with the EU av­er­age GDP per capita to ob­tain a re­sult. This method was used in 2012, when Malta’s GDP per capita was found to be 75 per cent of that of the EU. To­day, that com­par­i­son stands at 90 per cent. EU funds are granted to coun­tries so that they can come closer to be­ing the best coun­try eco­nom­i­cally, so if big steps have al­ready been taken – as in Malta’s case – it is ob­vi­ous that the coun­try will re­ceive less fund­ing.

Ob­vi­ously, the Mal­tese gov­ern­ment is not con­tent with what the Com­mis­sion is of­fer­ing: if we were, we would have said ‘thank you very much’ and taken what was be­ing of­fered to us. We are not con­tent be­cause we be­lieve that Malta needs an­other phase of solid fund­ing to con­sol­i­date and sus­tain the cur­rent eco­nomic growth. As an econ­o­mist, I can tell you that five years is not long enough to say that you’re home and dry: you need a longer span of years. There­fore we are ar­gu­ing that a coun­try such as Malta, which has man­aged to move for­ward to the point where it has the high­est eco­nomic growth in the whole Euro­zone, it does not make sense to leave the coun­try jog­ging on the spot as has hap­pened in the case of other coun­tries.

Our point of view is that it makes more sense to give more fund­ing in or­der that eco­nomic growth can be fur­ther sus­tained and con­sol­i­dated so that in the fu­ture it can be defini­tively said that Malta can move for­ward with­out a cer­tain amount of help.

We have also made men­tion of el­e­ments that do not nec­es­sar­ily have to do with our GDP: chal­lenges re­lated to in­fra­struc­ture, early school-leavers, cli­mate change, Brexit and other old vul­ner­a­bil­i­ties – such as be­ing an is­land state.

So far, the Com­mis­sion has said that it is will­ing to give us funds only as per the Ber­lin Method, but this may change as we ne­go­ti­ate. Thus far, not even the max­i­mum pack­age ceil­ing per coun­try has been agreed, with the Com­mis­sion stip­u­lat­ing that it is ready to spend 1.1 per cent of the gross na­tional in­come (GNI) levied from each coun­try. There has been dis­agree­ment on this fig­ure how­ever: coun­tries such as Bel­gium, Aus­tria, Swe­den, the Nether­lands and Lux­em­bourg – known as ‘the Fru­gals’ – want spend­ing to be capped at one per cent of the GNI, whilst the Euro­pean Par­lia­ment has been ex­tremely am­bi­tious and said that it wants up to 1.3 per cent of the GNI in spend­ing. From what I un­der­stand, how­ever, we will prob­a­bly end up with some­thing close to what the Euro­pean Com­mis­sion is propos­ing.

What is im­por­tant is that an agree­ment on fund­ing is reached by the au­tumn of this year, as any­thing other than that would re­sult in the de­lay of our planned pro­grammes. Such de­lays hap­pened dur­ing the last pe­riod when, due to a lack of an agree­ment, the money from the EU ar­rived in 2017 rather than in 2014.

Up un­til then, how­ever, the ne­go­ti­a­tions on our part will con­tinue: we are meet­ing dif­fer­ent coun­tries and trav­el­ling to the re­spec­tive pres­i­den­cies to con­tinue dis­cus­sions. Where ex­actly we are go­ing to land how­ever is any­one’s guess at the mo­ment.

Are there any spe­cific projects that the

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