In its attempt to shoot down and belittle the Labour government’s success in doubling the absorption rate of EU funds in just under two years, the Nationalist Opposition is resorting to unfounded statements. It is not being honest with the Maltese public when it claims that this success has been achieved despite the Labour government and not because of it when facts prove them wrong.
Even the editor of Times of Malta was taken to task by Nationalist spokespersons because, in the editorial of January 30, he acknowledged that the Labour government’s efforts to increase the utilisation of EU funds for the period 2007-2013, from 30 per cent to 78 per cent, was “quite a feat”. This was, in fact, a major achievement, as I shall explain.
The low absorption rate of EU funds under the Nationalist administration is not a Labour government’s invention or an unsubstantiated claim, as the Nationalist Opposition would have us believe. Even the international rating agency Moody’s noticed this negative performance.
In its Investors Service, published last October, when reviewing the EU funds absorption rates by the 28 EU member states, Moody’s stated that “between 2007 and January 2013, the absorption rate of these funds, Malta’s standing at around 30 per cent, was the third-lowest among EU countries after Romania and Bulgaria”.
This poor achievement is also confirmed by the European Commission, which attributed this failure to Malta’s cumbersome administrative procedures that result in administrative inefficiencies and which were never addressed by the then Nationalist government.
When I was assigned responsibility by Prime Minister Joseph Muscat for EU funds, following the elections of March 2013, I came face to face with this reality. I inherited a situation where about €200 million were at risk of being lost.
Calls for tenders for EU-funded projects were piling up at the Department of Contracts. Major projects were at a complete standstill because the previous administration failed to take difficult decisions. Processes at project programming level at line ministries were taking too long, in some cases years, for their finalisation and implementation. Payments by intermediary bodies to beneficiaries, the majority of them SMEs, were not being effected in time, thus putting enterprises in dire straits. Other payments were held up because of outright irregularities.
Were it not for the Labour government, millions of EU funds would have been lost
Were it not for the Labour government, millions of EU funds would have been lost.
This gives the lie also to the claim that, by March 2013, large and substantial disbursement targets were already in place with the groundwork being done by the Nationalist government.
However, in spite of all these difficulties, in less than two years, we managed to turn things round.
As a result of our efforts and endeavours and thanks also to the hard work and professionalism of staff members who are responsible for the implementation of the operational programmes, by the end of last year the absorption rate of EU funds stood at 78 per cent, which is more than double of what we inherited.
And we do not intend to sit on our laurels. Our objective is that, by the end of this year, which is the deadline for the closure of the funding programme 2007-2013, we would have increased the absorption rate to 100 per cent or the closest possible.
We will not be distracted by the Opposition. Our attention is now focused on the new funding programme 2014-2020. We need to make sure that we do not repeat the mistakes of the past.
That is why we have taken initiatives to reduce excessive bureaucracy to the extent that we have appointed a Commissioner for Simplification and Reduction of Bureaucracy. We set up a unit within the Contracts Department and the planning authority to fast track projects. We also have in mind to set up a centralised unit for the distribution of EU funds.
The objective now is to approach the next funding period with a suitable structure that would remains accountable from start to finish.
Through experience we have realised that the major challenge is not obtaining EU funds, although this is also an achievement, but absorbing them through project implementation and the efficient management of funding schemes. Otherwise, these funds would be lost.
This is where we make the difference when compared to the negative performance of the previous administration.
Come 2023, which is the end of the eligibility period for expenditure under the new funding programmes, we want to look back and pride ourselves that we have managed to utilise all the funding at our disposal for the benefit of our economy.
Ian Borg is Parliamentary Secretary for EU Funds and EU Presidency 2017.