Brussels confirms Malta will make net gain from EU

The European Commission in Brussels yesterday officially contradicted claims made recently by Labour leader Joseph Muscat that Malta was paying more than it received in EU funds.

The Commission said that figures in its possession clearly showed that Malta will remain a net beneficiary, at least until the current seven-year financial perspectives were over in 2013.

Brussels said what Labour was claiming could not effectively happen in practice since the current EU's budget framework for 2007-2103 "ensures that new member states are net beneficiaries on a cash basis in their first years of membership through a system of yearly advance payments and compensation in the first years following accession".

A spokesman for the EU's Budget Commissioner, Dalia Grybauskaite, told The Times: "Under the current budgetary framework, Malta is assured to receive significant allocations of cohesion funding. There is every reason to believe Malta will remain a net beneficiary of the EU budget."

Labour's claims, repeated on various occasions by Dr Muscat, most recently last Sunday, revolve around the 2007/2008 EU funds, which according to the party show the island is ending up paying more to the EU coffers than it receives. According to Dr Muscat, during this period, Malta paid €12.6 million to the EU more than it received.

These claims had already been denied by the government, particularly through its Permanent Representation in Brussels, Richard Cachia Caruana, who gave details on how much Malta actually received for its coffers.

According to the government, Malta had already ended up with €209 million more than it contributed since membership. Even when taking only 2007 and 2008, Malta ended up with a net balance of €26 million or €38 million more than the figure mentioned by Dr Muscat.

The Commission yesterday backed the government's data saying that according to its 2007 report, Malta was a net beneficiary of 0.54 per cent of GNI and preliminary figures for 2008 show Malta should maintain its position as a net beneficiary.

"It's important to recall also that estimating such budgetary balances is merely an accounting exercise of certain financial costs and benefits that each member state derives from the Union," the Commission spokesman stressed.

"This accounting allocation is non-exhaustive and gives no indication of many of the other benefits gained from EU policies, such as those relating to the internal market and economic integration, not to mention political stability and security," he added.

Asked for its reaction on the figures unveiled by Mr Cachia Caruana, a Labour spokesman refused to concede that Labour had the figures wrong and instead insisted figures quoted by Dr Muscat were taken exclusively from the Financial Estimates, published by the Finance Ministry, and not "simply checked" by the Commission.

However, according to the government, Dr Muscat forgot to add to his figures tens of millions of EU funds transferred by the Commission to Malta as "advance payments and compensation". These were precisely aimed to ensure Malta did not end up in the position mentioned by Dr Muscat.