Prime Minister Lawrence Gonzi told Parliament yesterday that the Government had not accepted the EU argument that Malta did not qualify for Objective One status within the European Union.
A country could not suffer an economic shock because of a sharp drop in funding
Furthermore, he said, once there was no agreement on the EU budget, the data for the calculation of Objective One status would have to be reworked using statistics submitted by EU member states in 2010, when several countries were in recession.
The present Objective One status – which applies to countries with a GDP per capita of below 75 per cent of the EU average, giving them the highest rate of EU funding – was established on statistics provided for 2009 which was the cut-off date. He said this average had dropped after Bulgaria and Romania joined the EU.
Dr Gonzi was replying to questions put by Leader of the Opposition Joseph Muscat and other Labour MPs after making a statement in the House of Representatives on last week’s EU summit.
The Prime Minister said that the EU budget would not be discussed in the December summit but would be the main topic in a summit to be held in January so that 2010 would be the new cut-off date.
Dr Gonzi said that if Malta were not to not qualify for Objective One status it would insist on transitional measures because a country could not suffer an economic shock because of a sharp drop in funding.
He said the calculations for a top-up of €200 million put on the table were linked to the amount that Malta received under the cohesion and structural funds during the last period.
Malta appreciated this step forward but felt it was not enough when one considered that the country benefitted from nearly €1 billion under the Objective One status. He said that the top-up would be a one-time concession.
The Prime Minister said that Malta was in a unique position to request transitional funds because it was the only country which had benefitted from Objective One for only one programming period. Malta’s arguments were acknowledged by many EU member states.
Cyprus managed to get a top-up because of its island status. This would also benefit Malta.
In the Lisbon Treaty negotiations, Malta had insisted on its unique status as an island single region state which put it at a disadvantage. This meant that it was fair for Malta to be granted transitory funds.
Dr Gonzi indicated that countries asking for expenditure cuts in the EU budget had not targeted funds under the cohesion pillar.
Malta is in a unique position to request transitional funds
Replying to questions put by George Vella, the Prime Minister said that the Gozo protocol on regional status had been initiated six months ago. Studies were at an advanced stage and would be presented to the European Commission. He added that Malta was the one of the countries that most absorbed EU funds. A number of projects were at a mature stage and claims were being made for the funding.
Dr Gonzi appealed to Parliament to be fair on the facts surrounding Richard Cachia Caruana, whom he praised for his expertise and professionalism that led to Malta acquiring about €1 billion (under the previous EU budget).
Mr Cachia Caruana, despite the fact that Parliament had given him a vote of no confidence, was giving his services as adviser in the present negotiations without any remuneration except for some expenses.
Dr Gonzi also said that Malta was making its arguments not only on cohesion funds but also under other headings.
Answering Alfred Sant on the meeting of the Group of Cohesion friends, he said the group defended its position that the cohesion pillar should not be attacked in the proposed cuts. The members of the group felt that although progress had been registered on the package to member states this was not enough. He was optimistic that an agreement could be reached.
Although contributor countries had the right to insist on accountability of funds, they would eventually benefit indirectly from sustaining the cohesion pillar which helped less developed states strengthen their economies. He was confident that the net balance on Malta’s level of contribution would be better than that established at the start of the negotiations.