Malta set to qualify for top funding

Preliminary data on the island's gross domestic product for 2003 show that Malta will almost certainly be retaining its favourable status as an Objective 1 beneficiary for the next EU budget covering the period 2007-2013.

This will effectively mean Malta will again qualify for hundreds of millions of euros in grants.

Based on preliminary data for 2003 published yesterday by the EU's statistical arm Eurostat, Malta has an index of 75 of GDP per capita in purchasing power standard (PPS) when compared to the average of the 25 EU member states.

This practically means that Malta just managed to make it through to Objective 1 status because according to EU rules, only countries within the 75 index level (PPS) are eligible for Objective 1 funding.

In 2002, the statistics showed that Malta had an index of 74 of the per capita volume index at the level of total GDP of the 25 member states.

The final estimate, and eventual confirmation of Malta's status, will only become available by the end of next year. Sources close to the Ministry of Finance told The Times the situation is not expected to change and yesterday's figures were very good news for Malta.

So far, Malta's status within the next EU budget was still most uncertain as many EU officials doubted whether the island would still be qualifying for the highest degree of EU financial support from 2007 onwards.

The first fears appeared earlier on this year when the then Regional Policy Commissioner Jacques Barrot said the situation of both Malta and Slovenia in keeping their Objective 1 status was still unclear.

According to the figures published yesterday, Slovenia will be losing its status as it has an index of 77 of the average GDP.

Another new member state, Cyprus, will also be considered "too rich" for Objective 1 status as its index hit the 83 mark.

Out of the old 15 member states, only Portugal will qualify for the highest degree of EU finding as it has a 74 index. The statistics show that Luxemburg is the richest in the EU and has almost twice the EU average GDP. The poorest countries are Lithuania, Poland and Latvia.

Last July, Tonio Fenech, parliamentary secretary in the Ministry of Finance, told The Times that Malta expected to still be eligible for the highest possible degree of funding. He did add, however, that this would be the last budget in which Malta will enjoy such status. Following 2013, Malta's economy is expected to grow substantially, which means there will be no further need of EU compensation.