Malta is hoping to get €680m in EU budget

PM Gonzi thanks his delegation

An extraordinary EU summit aimed at hammering out a budget for the next seven years came to an early close yesterday afternoon with no final agreement reached. Still, Prime Minister Lawrence Gonzi welcomed the outcome.

Malta entered the summit with the looming prospect of seeing its share of funding cut by 45 per cent. The €855 million it got over the past seven years was proposed to be whittled down to €480 million.

Now, although a deal has yet to be finalised, the latest figures placed on the negotiation table see Malta taking €680 million. This translates to a more manageable 20 per cent cut from the previous budget but €200 million above what was being proposed.

The figure is still not to Dr Gonzi’s liking, but he acknow-ledged that it was a big step forward for the country, whose arguments had been vindicated.

“Nothing is agreed until everything is agreed, but we must note how far we’ve come. We’ve moved an important step forward,” he said.

Like other EU leaders, Dr Gonzi said the summit was “construct-ive” and “positive”, paving the way for a final agreement to “hopefully” be reached by early next year under the Irish EU presidency following the positive work done by the Cypriots. This, he recalled, was similar to what had happened in 2005, when a deal took more than six months to be agreed upon.

Council President Herman Van Rompuy has now been tasked with trying to find a compromise in the next few weeks by continuing meetings with all member states.

Dr Gonzi said he was pleased with the work of Mr Van Rompuy, who had acknowledged Malta’s arguments, namely that the islands required a “special trans-ition period” even though it had emerged from the group of least developed member states, known as Objective One.

Because of this, Malta was offered an additional €122 million, with another €78 million offered due to its particular status of an island region cut off from mainland Europe.

Dr Gonzi pointed out that the budget proposals for this year were worked out on economic benchmarks from 2009, and the postponing of an agreement to next year meant that the new proposals would be calculated on 2010 figures.

He said it was still unclear whether Malta would gain or lose from such a change, but he warned that the islands’ economic successes could negatively impact the amount of EU funds they would receive. Dr Gonzi thanked his “incredible” delegation, namely Permanent Representative Marlene Bonnici and her team of number-crunchers. He also thanked Ms Bonnici’s predecessor, Richard Cachia Caruana, whose technical expertise were also utilised in bilateral meetings.

The summit, which was expected to stretch out till today, came to an early close because leaders did not agree with the proposals made by Mr Van Rompuy on Thursday night, which retained a ceiling of more than €970 billion over the next seven years (2014-2020).

The proposals contemplated increases in the Common Agricultural Policy and the Cohesion programmes, accommodating countries like France and poorer EU states, while making cuts in other areas, including international aid funds.

German Chancellor Angela Merkel immediately warned that an agreement was unlikely to be reached at this summit, and that EU leaders might have to meet again next year.

British Prime Minister David Cameron was considered to be one of the main obstacles to a deal being struck with his seemingly unshakeable position in favour of drastic cuts, primarily to reflect austerity measures being taken back home where he is under pressure from an increasingly Eurosceptic public and Parliament.

However, in a joint statement issued yesterday evening, the European Council said there was a sufficient degree of potential convergence to make an agreement possible at the beginning of next year.

“We should be able to bridge existing divergences of views,” the EC said.

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