Malta’s growing wealth is both good and bad news

Malta is closing in on the wealth gap in relation to its EU counterparts, which could see it losing its eligibility to qualify for the highest amount of funds possible under the seven-year budget starting in 2014.

Malta has surpassed the 75 per cent of the EU’s GDP average criteria, according to the latest Eurostat figures. Member states not exceeding this threshold are considered as being among the most countries in need.

Negotiations on the next EU financial perspectives have not yet started and statistics can change, primarily due to the impact of the recent recession across the EU.

In 2009, Malta’s average GDP per inhabitant, calculated on a formula which eliminates price disparities between member states, stood at 79 per cent of the EU average, two percentage points above those of 2007 and 2008.

Although this is positive news, as it means the Maltese are moving on, it shows the island’s average GDP over the last three years reached 77.6 per cent, above the 75 per cent threshold.

Malta is still in time to qualify for the maximum aid level possible in 2014 but this will only be possible if it becomes statistically poorer in 2010 and 2011, something which is difficult according to EU GDP forecasts for the next two years. The EU’s calculations are normally based on the GDP figures of the three years prior to the final decision on the seven-year financial perspectives.

If the EU maintains the same criteria for fund distribution in the 2014-2020 period, Malta will lose its current status of full eligibility, although it will still qualify for millions of euros in EU funds.

Talks on the new financial perspectives should start late next year but are not expected to be concluded before the end of 2012 and many acrimonious discussions are forecast between the “rich” and the “poor” member states. According to Eurostat, the richest EU citizens in 2009 were the Luxembourgers with a per capita GDP of more than two-and-a-half times the EU average.

The Netherlands came second, recording a level more than 30 per cent above the average while Ireland, Austria and Denmark were between 20 and 30 per cent above the EU average.

Romania and Bulgaria were by far the poorest member states, with their GDP almost 60 per cent below the EU average.

Cyprus is 20 percentage points richer.