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€1.1bn EU funds is ‘double win’

Malta’s €1.1 billion EU budget deal was achieved despite European funding methodology headwinds, Malta’s EU permanent representative Marlene Bonnici said yesterday.

The agreement, which must now be approved by the European Parliament, means Malta will be €627 million better off by 2020 once its EU contributions have been deducted – despite the country no longer being among Europe’s worst-off, and despite the EU’s overall budget having been trimmed, for the first time in its history.

“It was a bit of a double win,” Ms Bonnici said yesterday. “It’s a very good deal when one considers the context.”

During previous budget talks in 2005, Malta’s GDP per capita was slightly below the 75 per cent EU threshold, meaning Malta could – and did – argue that it merited additional funding.

Fast-forward to last week, and the situation had changed drastically. “Our GDP has risen, while that of several other member states has plummeted,” Ms Bonnici said.

“We’re no longer among the EU’s poorest, so to speak, so the funding methodology was not on our side.”

The deal struck by Malta will see the island receive up to €914 million in cohesion policy and agricultural funds between 2014 and 2020 – €200 million more than the European Commission had first proposed in June 2011.

Cohesion policy funds, which include regional development and social funds, go towards infrastructural and transport projects, investment initiatives and environmental protection measures.

The drastic increase in these crucial funds was tempered by a decline in budgetary allocations for two other sets of funds.

Funding for migration, internal security, education and fisheries, at €120 million, will be €19 million less than originally projected. And Malta’s share of the Connecting Europe Facility, which among other things includes €63 million earmarked for an eventual gas pipeline, is also down to €94 million – €71 million less than had originally been pencilled in.

Ms Bonnici, however, argued that the declines were not that significant. “Malta’s share of migration funds is already disproportionately high, for self-evident reasons. And Connecting Europe Facility funds are minimums, rather than definitive sums. If the Commission believes a project is worthwhile, it can increase a country’s allocation,” she said.

Co-financing mechanisms have also been reinforced, with the EU having agreed to co-finance up to 85 per cent of the cost of Malta-based cohesion fund projects.

It will now be up to Maltese governments between 2014 and 2020 to make the most of the allocated funds, which Ms Bonnici admitted would require meticulous planning. She was however optimistic.

“In May 2007 we were the first member state to have a funding strategy in place. Hopefully we can repeat that.”

And while Government officials left Brussels’ Charlemagne building last Friday with a spring in their step, Commission officials, stung by the first budget cut in EU history, were somewhat less chirpy.

“It’s not the budget that we wanted,” Martin Bugelli, who heads the Commission’s Malta representation, admitted.

“We wanted more investment in economic growth initiatives, although several innovative proposals made it through. Now we’ll have to see what the European Parliament makes of it,” he said.

Raking in

Funds June 2011 proposal Feb 2013 agreement
Cohesion policy and agriculture €715 million €914 million
Migration, internal security, education, fisheries €139 million €120 million
Connecting Europe Facility €139 million €120 million*
Total €1.019 billion €1.128 billion

*includes €63 million earmarked for a gas pipeline

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