Relieved from the tension of negotiations, Malta's chief negotiator Richard Cachia Caruana believes the government has managed to get the best possible EU membership package.

In an interview with Jesmond Bonello, Mr Cachia Caruana strongly denied Alfred Sant's claims that Malta will only receive funds for the first three years of accession. To the contrary, he insists that Malta will then be in a stronger position so far as funding is concerned.

Are you convinced you have negotiated the best package?

I am convinced we have negotiated the best possible package. We covered all the items we had a real interest in and I do not recall any items, however small, that we considered important and which are not successfully catered for in the negotiations. I am not denying that we had hoped to have done better in certain areas, but I am very satisfied that we have seen the successful conclusion of negotiations.

What are the strengths of the package?

The strength of the package is that all the issues which were of concern in Malta have been taken on board. In other words, the negotiation process did not only look at the interest of the government but of all the different segments of society. That meant there were some areas which concerned a small restricted group, like the olive-oil sector, which were also catered for in the package. It also meant that, for instance, in environment we had to walk a tightrope to balance the interests of hunters and environmentalists.

The weaknesses?

We underestimated the time required to negotiate the agriculture package. I would have preferred for us to have started substantive negotiations in agriculture much earlier. Of course, this was difficult because of the administrative capacity needed in the ministry which could not be built overnight.

I think it was a weakness because there were certain elements in the agricultural package which remained outstanding until the very end of negotiations and I would have preferred to focus solely on the financial package earlier. I don't think it affected the outcome but at one stage I was afraid that this could happen.

Is there something in the package you thought was impossible to achieve and you got it?

I do not think there is anything in the package which I thought was not achievable. We were very careful to base our requests on precedents. We are joining a Union which is already made up of 15 countries and basically this means that there is nothing new. All the issues we raised had been negotiated at some point in time with the present member states. For example, abortion, the issue of neutrality and acquisition of property by foreigners. Even though we are a country with unique characteristics, none of our specific problems were new to the Union.

Any disappointments?

I was disappointed we did not achieve a temporary solution on the seats in the European Parliament where we argued we should have been allocated six seats and not five.

This is an issue which the government will raise again during the next intergovernmental conference to be held after accession where we will have a say because Malta will be at the table where decisions are taken.

Given the way negotiations went, it was just not possible to find a solution as we were not negotiating with the European Parliament.

We were negotiating with the member states. I would say we managed to use our disappointment in this area to strengthen our position on other issues upon which negotiations were still open.

I would have also preferred to see our plastic bottles regime continue in its present format although the final compromise is acceptable and will see improvements right across the waste management spectrum.

You have mentioned the issue of MEPs. I am of the opinion that in this case and the issue regarding Malta's request to retain zero VAT rating, we were not treated in the same way as present member states, even if at the end of the day we managed to get a better deal than any other acceding country with regard to VAT. What do you think?

On the seats there were two countries that had a similar but not identical problem. In the case of the Czech Republic and Hungary there were member states that were smaller and yet were given more seats.

In our case, even though there was a member state of similar size that was given an additional seat (Luxembourg), there were no countries that were smaller. So the argument used by the EU was that in the case of the Czech Republic and Hungary there was clearly an anomaly and in the case of Malta this was not necessarily the case. We argue that it is. But the issue is that Luxembourg, which was given an extra seat during the final stages of negotiations on the Nice Treaty at the Nice Summit, was a member state sitting round the table.

On the issue of VAT, do you agree with my assessment that we have not been treated on the same level as two existing member states?

I don't agree. Even though I would have been happier with a clearer link to the position of the UK and Ireland, the fact that we have a transitional period up to 2010 on the basis that by that time there will be no member state still having that transitional period, is very significant.

The only other country which had a similar request was Cyprus, which only managed to get a five-year transitional period. If anything, they should be complaining.

What are the highlights of the negotiated package?

The fundamental principle is that we were provided with a solution in all those areas where there was a feeling that Malta's needs required special attention.

In other words, the EU has taken on board all the issues. The agriculture chapter is a case in point. Though negotiations focused on the income support package, which in itself is tailor-made for us, there were a number of other issues in agriculture which were specifically related to our needs such as rural development and which were catered for.

The overall negotiated package has killed the cliché that the EU is a one-size-fits-all institution.

Forget the national perspective for a moment, what specific sectors will benefit most out of the package negotiated and are you concerned that there could be a particular sector which might be affected negatively?

In general, the early gains will be for the business sector which will be guaranteed the world's largest market.

They would be the first to benefit. Obviously there are some sectors in the business sector which would have to adjust and there will be one or two elements within business as a whole which could experience a difficult transition.

In terms of the agriculture sector, this sector has been neglected for decades by successive governments. We had reached a situation where the government was giving the players in this sector minor handouts and used protective barriers to give them some form of income support.

I envisage that in the coming years there will be a total renaissance of this sector and strong redevelopment where Maltese products will be in demand both locally and abroad.

We are known throughout Europe for the Malta potatoes but we should also be known for a whole series of quality items like Maltese honey.

So far as the financial package is concerned, can you explain in detail the nature of the funding?

During the first three years of membership, Malta will be a net beneficiary to the tune of E194.3 million (Lm80.9 million).

The emphasis is on the word "net". The other aspects are the payments that Malta has to make, which total E177 million, and the total committed expenditure by the EU for Malta of E371.3.

These are made up of four components. In agriculture, during the period 2004-2006 we will get E29 million which goes directly to farmers. Then there are the cohesion and structural funds which require from Malta an element of some additional Malta co-financing (15-20 per cent). There are E79 million allocated for these projects where Malta will have to propose projects.

The third component of the funding is related to programmes and community programmes such as the educational and research programmes. Malta will get E30 million in funding for these purposes. Then there is direct budgetary aid totalling E233.3 million.

Can you give concrete examples of the projects which could benefit from these funds?

The selection of these projects includes a full internal process where each of the ministries put their ideas forward, then a local consultation process through the Malta Council for Economic and Social Development, and then an external consultation process with the European Commission.

By end January 2003, a first draft of these projects should be presented to government for discussion.

The projects currently being looked at include roads, the environment (potable water quality and precipitators at the power station), ports, the productive sector (possible grants for SMEs), agriculture (assistance for marketing and processing), fisheries (upgrading of port facilities), social policy (training and support for people who wish to get back into employment, including women) and Gozo (roads and employment).

In the past there were instances where Malta did not manage to exploit funds allocated by the EU for specific projects because it was not quick enough to present concrete proposals. The Labour Party is arguing that there is no guarantee that Malta will be able to get the funding for these projects. What is your reaction?

It's not true. The administrative structures we need are already in place and these include the Regional Policy Department which is part of the Office of the Prime Minister and which is overseeing the whole process.

The development plan needed to exploit this funding has already been drafted and we are perfectly on track. I can assure you that the day after accession we will present to the EU our list of projects on which funding will be required.

What was the first offer on the table?

On November 6, the offer for Malta was E76 million. That went up to E92 million on November 26. On December 11 the figure went up to E140 million, and to E194.3 million on December 13. The figures show that our reasoned persistence has paid.

Could you have been more persistent?

To get more money? I don't think so. We made the argument that we got a smaller share because of the structure of our economy and because we are less poor than other acceding countries. That was due to our relative wealth, the small size of the agricultural sector, our land and population. All these elements created a disadvantage.

The EU has recognised this issue and increased their offer on a number of occasions. It is clear that the EU has made a big effort on the issue of when to stop saying 'no' and start saying 'yes'. We felt that the final offer was extremely fair and beneficial for the country.

At any point during the past weeks, were you concerned we could fail to conclude negotiations?

I was extremely concerned that we would not get the money that we needed until the EU made the final proposal which was fully acceptable to us.

Is it true that the Maltese negotiators were being regarded as pests by the end of negotiations?

I think it is fair to say that from the briefings given by the Danish presidency, they were not very happy with our strong stand on the financial and VAT issues.

Clearly, they still needed to be persuaded in the last two weeks that we had a real case. We had to make our case based on facts and had to present it fairly but strongly.

It is not an emotional issue or a blackmail issue. If there was any corridor talk, it was that we were being persistent. Being persistent is not the same as being a pest.

I think we would not have got the result we managed to achieve had we handled negotiations in a way that made us out to be pests or to accept whatever was offered to us.

Alfred Sant is saying that the country should take a long, hard look at what its position would be after the first three years of membership, when, he claimed, it would no longer be a net beneficiary. What is your reaction ?

First of all the system of financing in the EU is based on programming periods. The current programming period ends in 2006. What government has negotiated with the current member states is the financial package till the end of this programming period.

Immediately after accession the process will begin for the budgetary period which ends in 2013. This will mean an improvement in the share going to the current candidate countries since they will get the same share that goes to the current member states.

There will also be the requirement of unanimity in the decision-making which means that Malta will have to agree with the decisions taken since the process requires a unanimous vote. So we will be in a stronger position since we will be one of the member states actually taking the decision.

Dr Sant is also saying that the financial package was much worse than the one concluded by George Borg Olivier for independence and that of Dom Mintoff in the '70s... your reaction?

If one makes some basic calculations one will realise that this is absolutely not the case.

Dr Sant is arguing that the government has accepted what the EU expected of it without much of a fight, in order to satisfy the government's obsession with joining the EU. What is your reaction?

Government was not interested in membership at any cost. We were only interested in membership under the right conditions. We strongly believe that these conditions have been successfully catered for in the package negotiated with the EU. Therefore the question of obsession is being conveniently used from a political point of view but it does not reflect the facts.

What is your own personal opinion on Dr Sant's partnership pledge?

I am still waiting to see what it is.

Most surveys show that a substantial part of the electorate is still undecided on the issue of membership. Are you confident the overall package negotiated will convince the majority of this part of the electorate?

It has to be understood that there is a certain percentage of the electorate which made up its mind some time ago for different reasons. People have to look at all the implications of membership: the positive and the negative.

What this package will do is set people's minds' at rest that the issues of particular concern to us have been successfully taken care of in the negotiations. One has to bear in mind that negotiations focus on the negative aspects. The other 95 per cent of the acquis, which is either positive or already a practice here, was also part of the negotiations but what is positive was uncontested.

What is the technical schedule from now on with regard to the preparations for the treaty?

The drafting of the treaty is expected to be concluded by the end of January. After that the treaty goes to the European Parliament for its assent and after that we expect the signing of the treaty in Athens on April 16.

After that the whole ratification process starts in acceding countries and member states. One interesting factor is that following April 16, Malta will gain observer status in all the decision-making bodies in the EU and this will be the case until the actual accession.

Do you expect the referendum to take place soon?

Yes. Now that the negotiations have ended and the treaty is being finalised, it appears to make sense for the referendum to proceed.

Are you confident the government will win the referendum?

The issue for me is that it cannot just be the government winning the referendum. The referendum has to be fought by all the people in favour of EU membership because this is their future.

But are you confident of a 'yes' vote?

All the indications are that the majority of people believe that EU membership is in their long-term interests and in the interests of the country. But one cannot take any referendum or election for granted.

What will happen to structures like the MEUSAC and MIC following the referendum?

MIC clearly has a role beyond accession. In other member states the first years after membership also required independent information to allow the people to understand the new processes.

MEUSAC has been an extremely useful experience. I would imagine a situation where with the strengthened Malta Council for Economic and Social Development some of MEUSAC functions will be taken over by MCESD.

The consultation process of the past three years had been extremely useful for the country and I hope that this method of consultation will continue.

Two days ago you featured prominently in a cartoon published in The Times about pride and peacocks... Do you feel proud of your job?

What I am particularly proud of is not the results obtained but the working system that operated within the civil service leading to those results.

This process has changed the civil service. I would go so far as saying that the negotiations were totally owned by the civil service from the permanent secretaries downwards.

My pride is particular to their pride in doing an excellent job. I am also very satisfied that we have managed to show that the negotiations process is not related to the size of the country but to the quality of the case one makes in favour of one's position.

Finally, have you been made redundant now so far as your EU job is concerned?

Unfortunately not.