PM: EU funding data may have to be reworked using 2010 figures

Prime Minister Lawrence Gonzi said today that the government has not accepted the EU argument that Malta does not qualify for Objective 1 status within the European Union. Furthermore, he said, once there was no agreement on the EU budget, the data for the calculation of Objective 1 status may have to be reworked, using 2010 figures.

Replying to questions from Labour MPs after delivering a statement to the House on last week's EU summit, Dr Gonzi said the cut-off date for the calculation of Objective 1 status had been 2009. If the talks continued into the new year and 2010 became the cut-off year, things may change since several countries had gone into crisis in 2010 because of the international financial situation.

Malta, therefore would await the final data, but if it did not qualify for Objective 1, it would continue to insist on transitory measures since one could not immediately suffer the economic shock of seeing a sharp drop in funding.

Objective 1 status is granted to countries whose development is inferior to 75% of the EU average. Such countries would be eligible for the highest rate of EU assistance.

Dr Gonzi explained that during the summit, Malta had been offered a €200m once only top-up of the funds it would be eligible for if it did not achieve Objective One status. Malta's position was that this was an improvement, but more should be done.

Malta was making the point, he said, that it was the only country which had benefited from Objective One for only one programming period and therefore deserved transitory provisions.

Dr Gonzi said nothing was assured yet, not even the €200m transition, although it was unlikely to be reduced. He said Malta was also arguing that Gozo as a region should continue to benefit from Objective 1 status and the issue was being further discussed.

On the use of the current funding for Malta, Dr Gonzi said that Malta was among the countries which were absorbing the highest rate of funds allocated to them. He was confident that all the available funds would be used.

Replying to points raised by Alfred Sant on Malta's level of contributions, Dr Gonzi said formulae were still being worked out and he was hopeful that the ultimate result of the talks would be favourable and Malta's net balance would by better than at the start of the talks.

Dr Gonzi said he could understand that contributor countries wanted to see their funds put to good use. When such funds were put to good use and the economies of the other countries grew, the creditor countries would benefit too. However those who wanted cutbacks, including in the administration of the EU, had to keep in mind the increasing demands which were being made, including the accession of Croatia.

Replying to other questions on the presence of Richard Cachia Caruana at the summit talks, Dr Gonzi said Mr Cachia Caruana been involved in the Budget talks from the outset, It was mostly to his credit that Malta was allocated almost €1 billion in the current programming period. The national interest demanded that his experience should not be lost and he had therefore asked him to stay on as consultant. Mr Cachia Caruana had wanted to leave after the Parliamentary vote, but had stayed on without remuneration other than to cover his costs. The country, Dr Gonzi said, should be grateful.