Gozo officially recognised as separate region

Gozo has been officially recognised as a separate region in the regional policy chapter closed in Malta's EU accession talks in Brussels yesterday.

Foreign Minister Joe Borg described the agreement as a "significant step". Even though the issue of regional financing for applicant countries had not yet been decided upon, the agreement meant Gozo would be entitled to financial assistance should the rate of development in Malta surpassed that of Gozo.

The final allocations to Malta under the structural funds and the cohesion fund would be defined at a later stage.

The EU's regional policy is based on financial solidarity. Part of the member states' contributions to the community budget goes to the less prosperous regions and social groups.

Gozo will be treated as a region since it falls within the periphery of a main land, and is therefore considered to suffer from certain disadvantages.

Addressing the meeting in Brussels yesterday, the head of the core negotiating group, Mr Richard Cachia Caruana, said one key element which had enabled the closure of the regional chapter was the effort Malta had made to put in place those structures that would ensure an effective management of the structural and cohesion funds.

The regional policy directorate within the office of the prime minister would provide the leadership needed to coordinate both the programming and management of the funds.

The first draft of Malta's single programming document would be forwarded to the Commission by the first quarter of 2003. It would also include a separate priority entitled 'Regional Development of Gozo', dealing with Gozo's special needs.

Mr Cachia Caruana explained that the disadvantages faced by Gozo derived particularly from the island's double insularity as well as its over-dependence on the primary and secondary sectors of employment.

In 2000, Gozo's regional gross domestic product per capita stood at e6,160, which is 71.7 per cent of the national average.

The economic and social development of the island was limited by its small size and resources, which made large investment projects unprofitable and did not permit economies of scale.

The government had reached agreement with Eurostat concerning the financial classification for the Maltese islands.

The classification will be complemented by a separate proposal to provide for suitable measures under an appropriate framework to address the issues specific to Gozo.

Mr Cachia Caruana said the agreement would take into account Gozo's permanent and specific needs stemming from the structural handicaps linked to its island status, such as double-insularity, environmental fragility and the small size of total population coupled with a high population density.

At yesterday's meeting, it was also agreed that certain pending requests pertaining to the regional chapter would now be dealt with under the competition and taxation chapters, which are still open.

Dr Borg said that at yesterday's meeting, further progress was registered in the agriculture and Customs Union chapters.

In fact, all issues pertaining to the Customs Union chapter, save for the removal of agricultural levies, had been exhausted, Dr Borg said.

It was agreed yesterday that the removal of levies would now be finalised under the agriculture chapter.

The funding of the Common Agricultural Policy is to be discussed with all the applicant countries between October and December.

Discussions yesterday also focused, among others, on the veterinary and phytosanitary measures, (animal and plant life) which the government hopes would be provisionally concluded by September.

Speaking about the agriculture chapter, Mr Cachia Caruana said it was an encouraging element that all sides clearly recognised that adequate measures needed to be put in place to ensure the continuing vitality of Maltese agriculture.

"We are pleased to note that the Union has recognised the need for special measures, taking into account the exceptional small scale of Malta's agriculture, the specific constraints of the island, the high price differentials between the local products and the EU goods."

The closure of yesterday's chapter means that Malta has now closed 24 chapters out of 29 in the EU accession negotiations.