Malta will qualify for full funding from the EU between 2007 and 2013 after a re-calculation of its GDP per capita carried out by Eurostat, the EU's statistical arm.
Prime Minister Lawrence Gonzi yesterday described the news as "very good".
The government had been lobbying hard for the country to be given Objective 1 status under the next EU budget after earlier estimates of its GDP had put the country at risk of losing out on a substantial amount of funding.
Eurostat yesterday published a revised version of its GDP data, which will be used for the calculation of funding eligibility of EU regions. In purchasing power standard (PPS), a statistical calculation used by the EU across the 25 member states, Malta has been re-classified as having an average 74.75 percentage points of the EU's GDP average per capita for the three-year period between 2000 and 2002.
Malta thus falls within the EU classification of an Objective 1 country for structural and cohesion fund calculation purposes. Preliminary figures published last January for the same period had shown that Malta would not qualify for Objective 1 funding. This was because it had an average of 75.91 per cent of the EU average and according to the rules only those regions with a GDP of under 75 per cent are entitled to such a level of funding.
As soon as the upsetting news was published last January, the Maltese government had put its diplomatic machinery into full gear, with the Prime Minister also travelling purposely to Brussels to discuss the issue with European Commission President José Manuel Durao Barroso and Regional Development Commissioner Danuta Hubner.
The government argued that the Commission should have used more recent data when making its calculations, data which showed that Malta remained under the 75 per cent mark.
The first reactions from the EU had not given much cause for hope, with the Regional Commissioner saying she had to follow the rules, although the Commission President later expressed optimism that a solution would be found.
Following yesterday's news, the Office of the Prime Minister said it appeared clear that Malta would now retain Objective 1 funding status.
It explained that "this new data will be the basis used in the discussions on the cohesion policy during the final negotiations on the Financial Perspectives 2007-2013 that are scheduled to be held under the Luxembourg presidency over the coming months.
On the basis of this data, Malta will retain its Objective 1 status (now referred to as the convergence objective in the Commission proposals currently before member states) over the 2007-2013 period".
Dr Gonzi was quoted saying that this "reflects the position the government of Malta has consistently held in discussions on the subject".
A government source told The Times that before the publication of yesterday's data, Malta was risking losing more than €100 million (Lm43 million) in funding over the seven-year period. Malta would now qualify for over €800 million (Lm344 million).
Malta's Permanent Representative to the EU, Richard Cachia Caruana, told The Times this effectively means more funding for Maltese projects which can be put in place following 2007.
He said "the actual amount has still to be calculated as the discussions of the financial perspectives are still ongoing".
The EU presidency, he added, was pressing for a final political agreement to be reached by June, but this all depends on the other member states.
Asked whether the new data would now change the initial reservations expressed by the Maltese government over the budget proposals, Mr Cachia Caruana said: "It is now in Malta's interest to have a deal as soon as possible so that we can start preparing for the actual full utilisation of funds and the projects connected to them".
He stressed, however, that Malta still had some pending issues in the area of cohesion policy. "We are still not happy with the 'distribution key' that is used by the Commission for the allocation of cohesion funding and we are also looking at the issue related to the status of islands in the cohesion context".
Malta would continue to discuss these issues with all the players involved in order to try to bring about the necessary changes, he said.