UPDATED: Malta 'falling back' in receipt of EU funds - MLP

(Adds Finance Ministry reaction to yesterday's statement by Dr Mangion on government finance)

The government in the first six months of this year had only managed to get €12 million in EU funds to Malta, even though the projection for the whole year was of €116 million, opposition finance spokesman Charles Mangion said today.

He said these were structural funds linked to specific projects. The funds were handed over once the preparatory administrative work was completed and once the projects were completed in a specific time.

“Our country is falling back in the receipt of EU funds because administratively and in the management of projects, the Nationalist government is not efficient. This is throwing economic development back,” Dr Mangion said.

An explanation from the government was required.

Dr Mangion further pointed out that Malta paid a monthly €5 million contribution to the EU in terms of its obligations.

“This means that not only are we falling back in the receipt of EU funds, but at the same time our contribution is being made regularly, as it should, and this is negatively affecting the country’s financial situation,” Dr Mangion said.

Meanwhile, the Finance Ministry reacted today to remarks by Dr Mangion yesterday where he criticised the government’s budget projections.

The ministry said it would have been wiser had Dr Mangion held back until the full year figures were issued.

The ministry recalled that at the last budget, thanks to economic growth, it was able to reduce income tax so that the people could have more disposable income ahead of the problems stemming from rising oil and food prices.

Thanks to the government’s measures, and despite the international turmoil, the domestic economy had still expanded by 3.5 percent in the first half of this year and government revenue rose by €57 million.

It was also worth recalling that the government had substantially increased a number of social benefits, including children’s allowance, which increases were reflected in the spending of the first half of the year, but would not be reflected in the second.

The biggest impact on the government’s spending, however, was an unexpected increase of €30 million in assistance to Enemalta so that the power surcharge could be kept at 50% up to June.

The ministry said the government remained committed to its election promises, in the context of economic and social realities which the country was facing because of the international economic crisis.

The ministry said it was still awaiting the Labour reaction to its budget consultation document.