Better less, but quicker...

There’s little, if any, satisfaction in national affairs in being able to at some moment say “I told you so”, or even in being proved right over the long term. Those were my thought trends after reading the Times of Malta leader of April 30 about Malta having moved, in the short space of just four years, from being a major absorber or “good performer” in getting EU funds, to a laggard in such rankings.

Rather than Malta’s interests being best protected through being a net beneficiary, it was much more vital that speed and promptness of inward due payments be emphasised

Four to five years ago however the topic had a different nuance. The big argument locally then was about whether Malta was actually a net contributor, or net beneficiary, of EU funds.

And I distinctly remember, among others, Times of Malta’s then Brussels correspondent, Malta’s permanent representative Richard Cachia Caruana, and others, trooping out figures galore to prove the point that Malta was in fact a net beneficiary.

It was then that I had started to strongly make the point that, rather than Malta’s interests being best protected through a being a net beneficiary, it was much more vital that speed and promptness of inward due payments be emphasised and worked hard towards.

And here we are now, a further five years down the road, with a thousand and one excuses being brought out for the current reality of delay in receiving funds allocated to us under approved projects.

Five years after joining the EU, in an EDRC (University of Malta) commemorative book, this is what I had written:

“While it always remains important to what extent Malta’s public finances benefit, or otherwise, from EU funds, the issue is far too often projected in absolute end-of-every-year, or over-the-cycle, terms.

I submit that to view the issue only in such terms is very much lacking of that professional technical approach which should also consider funds flow over a cycle as possibly even more important in certain economic conjunctures than absolute yearly net positions.” (Malta in the EU: Five Years on and Looking to the Future”, UoM, EDRC, 2009.)

In simple terms I was saying that pace of constant cash flow was as much, if not more, important for our public finances and the economy than net debtor or positioning.

There is undoubtedly a laborious and complicated bureaucratic methodology working in Brussels which impacts on this pace of cash flow.

Similarly, from our end, we are increasingly facing the acute mismatch between available local resources (including in the public service) and the extent of submitted projects themselves. Both ends can be summed up as contributors towards Malta not actually receiving the funds which are due to it punctually and speedily enough.

Is there any research to show which side is the bigger culprit in funds not flowing to Malta as quickly as expected?

I recall having read something about this specific issue or characteristic of the EU’s being a perennially slow payer (incidentally Libya too has such a reputation!), written by Bernard Gauci when he was still in the US. Gauci now advises the Central Bank of Malta. And perhaps it is again time for him, or some other academics, to take up the issue.

Again quoting from my paper in the above mentioned book: “Even if nations’ finances cannot ever be expected to follow flow patterns identical to those one requires in the world of business, for them too remains valid the concept that there are times when slightly lesser incomes, but on a more regular and punctual flow patterns, is to be preferred and worked harder for.”