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Commissioner defends proposed financial transactions tax

EU Regional Policy Commissioner Johannes Hahn (right) with Martin Bugelli, Head of EU Representation, during the meeting with Prime Minister Lawrence Gonzi at the Auberge de Castille in Valletta, yesterday.

EU Regional Policy Commissioner Johannes Hahn (right) with Martin Bugelli, Head of EU Representation, during the meeting with Prime Minister Lawrence Gonzi at the Auberge de Castille in Valletta, yesterday.

For European institutions to have a higher degree of independence they must have their own sources of funding and the proposed financial transactions tax is one way of achieving this, according to EU Regional Policy Commissioner Johannes Hahn.

The EU-wide tax proposal is opposed by some countries, including Malta and the UK, but the Commission is insisting on the need to raise funds independently of the contributions made by the member states.

Commissioner Hahn said yesterday that the idea of having EU institutions finding their own sources of funding was mentioned for the first time in 1957 and reconfirmed in 1970.

“It has been discussed ever since and it is important for the EU to have a higher degree of independence, and finding its own resources is an essential element of this,” Mr Hahn said.

He was asked about the controversial tax at the end of a meeting with Prime Minister Lawrence Gonzi at Auberge de Castille in Valletta.

Mr Hahn said the Brussels executive was aware of the concerns raised by Malta and other countries and insisted the matter would now be discussed in the Council of Ministers.

“We are fully aware of the concerns but the principal idea that the EU should have its own funding sources must survive,” he said.

Mr Hahn confirmed Malta will receive less EU funds in the forthcoming budget but described this as a sign of success.

“The objective of regional and cohesion funds is to help poor regions and Malta is no longer a poor region,” he said, when asked whether Malta was being penalised for its success in using EU funds.

Malta’s economic performance since joining the EU has meant the island no longer enjoys Objective One status, which is the highest level of funding a country can achieve.

However, under proposals put forward by the Commission for the forthcoming 2014-2020 budget, a new status would be created for regions in transition. Malta will likely benefit from this status but it will still mean a lower level of funding than the country has enjoyed until now.

Mr Hahn said he was impressed by Malta’s absorption of funds, which was above the EU average. “I can leave the island with a very good feeling.”

While in Malta, Mr Hahn attended a meeting of the auditors of EU structural funds.

During the meeting, Finance Minister Tonio Fenech said since it joined the EU, Malta had been allocated a €1 billion in structural and cohesion funds.

The minister said the 2004-2006 structural funds allocated to Malta had been fully absorbed. The 2007-2013 programmes were well under way and were expected to reach over 80 per cent commitments by the end of this year.

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