Malta, dissatisfied with the European Commission’s budget plans for the next seven years, has proposed a new formula aimed at remaining eligible for the highest possible EU funding.

The proposal was made by Deputy Prime Minister Tonio Borg, noting that Malta had only benefitted from full funds only once in a given seven-year period.

The country will probably lose the right to the highest level of funding due to the “statistical effect” of new entrants Bulgaria and Romania. Thus, Malta is proposing that “it should be treated as a less developed region in terms of allocations” meaning it will remain fully eligible.

Dr Borg said: “There would be no impact whatsoever on the net contributors to the EU Budget and only an irrelevant impact on the net recipients.”

If the current Commission proposal is not amended, Malta risks becoming the only member state to lose millions of EU funds in the coming programming period when compared to the last budgetary period (2007-2013).

According to EU rules, member states and regions will only be eligible for the highest amount of EU funds if their GDP is below 75 per cent of the EU average. While Malta was clearly in this category in 2005, when negotiations on the 2007-2013 period were concluded, recent data shows that the island has surpassed the threshold, particularly after Bulgaria and Romania joined the EU in 2007.

Their low GDP affected the EU’s overall statistics, so Malta appeared to have a higher GDP.

Dr Borg said that the issue was “of substantial concern” for Malta because the Commission proposal, which, he noted, disregarded this problem, “has a disproportionate negative impact on Malta”.

He said: “On the basis of present indications, Malta will be the only region – and also the only member state – which, due solely to the statistical effect of the accession of Bulgaria and Romania, will probably lose its eligibility to the highest level of assistance from the Structural Funds.”

Malta benefits from almost a €1 billion in EU funds, which, apart from boosting the economy, are used to finance the majority of its infrastructural and social programmes.

Council sources said that although Malta’s proposal could easily be satisfied as it would not have any major effect on the EU’s overall Budget, “member states are normally against setting precedents”.

The EU’s financial perspectives, as the seven-year Budget is technically called, have to be adopted unanimously.

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