EU pledges top funds for Malta

The third progress report on cohesion, published yesterday by the European Commission in Brussels, has confirmed that Malta will be entitled to the maximum amount of funds possible under the next EU budget covering the period 2007-2013.

This will effectively mean that during the seven-year period, Malta will receive about €800 million (Lm359 million) in aid for various projects related to the infrastructure, employment and for boosting its overall economic performance. The final figure would be subject to decisions yet to be made on the contentious EU budget.

GDP statistics issued by the European Commission had already shown Malta qualifying for this level of funding, although this had been in serious doubt for some time following the publication of earlier GDP data.

The term currently used for what are known as Objective 1 funds will now change to Convergence Region funds.

The report shows that following enlargement, disparities between member states grew. In 2002, the most recent year for which regional data is available, levels of GDP per head ranged from 189 per cent of the EU-25 average in the 10 most prosperous regions to 36 per cent in the 10 least prosperous ones.

Over one quarter of the EU's population in 64 regions have a GDP per head below 75 per cent of the average. In the new member states, this concerns 90 per cent of their population, the exceptions being the regions of Prague in the Czech Republic, Bratislava in the Slovak Republic, Budapest in Hungary, Cyprus and Slovenia.

According to the latest GDP statistics published by the Commission and which will be used for the purposes of the next financial perspectives, Malta's GDP per capita for the year 2000-2002 is slightly lower than the 75 per cent mark of the EU average.

The Commission's report also describes the state of the regions in the enlarged EU in terms of levels of employment and productivity.

In general, employment rates in member states remain well short of the 70 per cent target set for the Lisbon Strategy by 2010 (or 67 per cent target in 2005), averaging 62.9 per cent for the EU25 in 2003.

It is in only four member states - Denmark, Sweden, the Netherlands and the UK - that the rate reaches 70 per cent, while it slips as low as 51.2 per cent in Poland. Some 22 million additional jobs are needed to meet the 70 per cent target. In the new member states, employment would have to increase by one quarter to reach 70 per cent, equal to seven million jobs.

At the regional level, the picture is more diverse than at the national level. Only one quarter of the EU25 population resides in regions where the 70 per cent employment rate target has already been achieved - thus 200 of the 254 EU regions are below the target rate. Almost 15 per cent of the population lives in regions where the rate is below 55 per cent. These are predominantly in the new member states and in southern parts of Spain and Italy.

Employment rates remain low among most of the least prosperous regions. Above average employment rates are found in only a handful of regions with GDP per head below 75 per cent of the average.

The report states that differences in productivity between member states are stark - less than 30 per cent of the EU25 average in Poland and the three Baltic states, but over 150 per cent in Luxembourg and Ireland.

The 10 new members, including Malta, stand apart at the bottom end of the scale; productivity in all EU15 countries - except for Portugal - exceeds that in all new member states. Thus, in spite of strong productivity growth in recent years, continued growth of both productivity and employment will remain necessary for convergence to be achieved.

European Regional Policy Commissioner Danuta Hubner said at a press conference the report confirms the need for an ambitious cohesion policy and adequate resources from 2007.

"There are wide gaps in prosperity and employment in the enlarged Union. A population of roughly 140 million lives in regions below or close to 75 per cent of the EU average GDP.

"Here, the community has a clear task in promoting faster growth in line with the objectives of the renewed Lisbon Strategy for growth and jobs. The evidence presented in this report shows that the European Union is playing an essential role in ensuring that investment for growth and jobs is a top priority," she said.

Commissioner Hubner appealed to the Council and the European Parliament to do everything possible to reach an agreement on the next financial perspectives under the Luxembourg presidency in a way that allows the challenge of cohesion to be addressed at an adequate level in the light of the analysis set out in the report.