Malta's EU contributions

EU Commissioner Gunther Verheugen was in Malta recently. He is mostly remembered for going out of his way to help the Nationalist government get Malta into the European Union at all costs, including threatening George Vella, then deputy leader of the MLP, that unless Labour changed its policy on membership, he (Mr Verheugen) would do everything in his power to ensure Labour would lose the referendum and the election.

This time, too, Mr Verheugen put his foot in it on the question of whether Malta has to date been a net beneficiary or net contributor of the EU. Prime Minister Lawrence Gonzi immediately jumped on Mr Verheugen's claim, namely that Malta has been a net beneficiary since joining the EU, in order to rubbish Labour leader Joseph Muscat's assertion that official figures show that during the last two years Malta has paid €12.6 millon more than it has received in EU funds.

The first thought that came to my mind on reading what Dr Gonzi had said when quoting Mr Verheugen was that while the Prime Minister was so ready to believe Mr Verheugen about EU funding, the same Dr Gonzi was not ready to believe another EU Commissioner, Laszlo Kovacs, who said that charging VAT on the registration tax of new vehicles went against EU regulations.

But let's turn back to the question whether Malta is better off financially as a member of the EU. I am not going to refer to government statistics quoted by Dr Muscat. I refer to what Labour candidate Sharon Ellul Bonnici quoted in an advert on March 22 from a detailed study conducted by a foreign NGO, Open Europe, which specialises in EU matters.

Open Europe found that to implement EU legislation, the government has to date spent €417 million, around €72.5 million a year, on top of the millions Malta is paying to the EU budget - in 2008, €61 million and rising.

Much more revealing - and confirming the Open Europe study - is a study made by another NGO based in the UK, Taxpayers' Alliance. In this study, published also as a book under the title The Great Rip-Off, this organisation claims that the total burden being carried by all EU citizens in the 27 member states, is a hefty €1,219 trillion, equivalent to around €2,400 per EU citizen per year, and not the €235 euros per year estimated by the EU. Taxpayers' Alliance bases its findings on the direct contributions paid to the EU budget by member states, the expense involved in order to conform to EU directives, the expense involved to administer EU regulations, and the general administration expenditure of the EU. And, above all, the higher prices EU citizens are forced to pay for food due to the Common Agricultural Policy of the EU.

The reaction of the European Commission to the Taxpayers' Alliance report was that the EU uses a totally different method to calculate the expenditure involved to member states. The Commission does not take into consideration the expense involved for member states to conform to EU directives.

No wonder that despite all the hype about EU funds (Vince Farrugia please note), Malta's national debt keeps increasing by leaps and bounds. If we also had to consider Malta's growing trade deficit with the other EU states - from €840.5 million in 2003 (the last year before joining the EU), to €1,796.3 million in 2008, the reality of Malta's situation as a member of the EU becomes much grimmer.