The question of what funding will be allocated to Malta under the next EU budget was raised in the European Parliament yesterday but the EU commissioner responsible for regional policy said she had no answer as yet.

Replying to questions by Nationalist MEP Simon Busuttil, Danuta Hubner said the Commission was aware of the objections being raised by the Maltese government over the funds to be allocated under the new budget proposal for 2007-2013.

When pressed to express her opinion on the situation, she declined to answer.

The issue was raised during a hearing of the Parliament's regional development committee in Brussels.

Dr Busuttil stressed there was a link between the timing and the content of the cohesion policy package being proposed by the Commission for the next financial period. He said this applied particularly in the case of Malta which is considered as a single region.

Dr Busuttil explained to committee members that under the current scenario being proposed by the Commission, Malta stands at just above 75 per cent of the GDP threshold for the years 2000-2002, which means it is outside the Objective 1 status that makes it eligible for funds.

On the other hand, he said, if one looked at the preliminary data for regional GDP per capita for 2003, and took the average of more recent data from 2001-2003, Malta would be back to the original Objective 1 status. This would make it eligible for the most advantageous funding possible.

In reality, this meant that if the decision on the financial package were to be taken in June, as the Commission was proposing, Malta would be outside Objective 1. But if the decision were taken later, following the confirmation by the Commission of the 2003 data, Malta would be considered an Objective 1 region, he said.

Dr Busuttil asked the Commissioner to state clearly how the Commission was proposing to address this issue, which was a very sensitive one for Malta.

Ms Hubner said there are regions that are affected in the other way round, in the sense that they are now eligible but would no longer be when the new statistics are available. She admitted that this might be painful for the affected countries.

She recognised the difficulty this issue was creating but told Dr Busuttil she did not know how to go about this issue.

Ms Hubner explained that while discussions on the issue will continue, for the moment she did not have a reply to give regarding Malta.

The issue was brought up during a meeting of EU Foreign Ministers earlier this week when Foreign Minister Michael Frendo officially informed the EU of the government's objections to the European Commission's proposals for the new budget.

He said Malta would not be in a position to approve the budget if it is not considered an Objective 1 region. The budget can only be agreed by unanimity and a 'no' by Malta would stall the budget negotiations.

The issue will also dominate discussions between Prime Minister Lawrence Gonzi and Commission President José Manuel Durao Barroso later on this month in Brussels. The Prime Minister is also scheduled to meet Ms Hubner.

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