House to debate EU deal next month

The prime minister yesterday informed parliament about the conclusion of the EU membership negotiations and said the House of Representatives would be able to debate the outcome in January before the people were asked to give their seal of approval at the referendum.

Dr Fenech Adami said in a statement that last Friday he had on behalf of the government accepted that Malta join the EU on May 1, 2004 according to the terms and conditions that had been negotiated.

He said the conclusion of accession negotiations with 10 applicant countries, including Malta marked the end of the division of Europe and the birth of a new, united, Europe.

This was a historical development that Malta was proud to form part of as it would mean peace, economic and social progress, political stability and solidarity for Europe.

He recalled that Malta had started its membership talks on February 15, 2000 after having submitted its membership application on July 16, 1990. It had been a long road during which Malta saw many changes but it was now in a good position to join the EU at its next enlargement.

The talks had touched every aspect of the economic, political and social sectors and had led to a final agreement. The government had always believed that with determination and confidence in itself and in the Maltese people, it could bring about the best conditions for accession.

The agreement would now be submitted for the seal of approval by the people at a referendum.

Before that happened, however, the House would next month be given the opportunity to debate and express itself on this historical development for Malta and for Europe.

Dr Fenech Adami thanked all those who had taken part in the "long and often difficult" negotiations, particularly Foreign Minister Joe Borg, the chairman of the negotiating group, Richard Cachia Caruana, ambassador Victor Camilleri, the other members of the core negotiating group, the members of the Malta EU steering and action committee (Meusac), permanent secretaries and directors of government departments.

Dr Fenech Adami said he particularly wanted to thank the Maltese people for having at the last elections given the government the mandate to hold the negotiations up to their successful conclusion (applause).

The people would now have the opportunity to vote freely to ratify the agreement that had been reached.

Opposition leader Alfred Sant and Labour MP Joe Mizzi asked the prime minister to explain the nature of the Lm80 million which the EU had allocated to Malta. Would they be a hard currency grant or would they be linked to particular projects?

How would the subsidies on food imports be worked out? Would Malta buy its food from the EU or other countries on the basis of the EU's internal prices and then grant subsidies to reduce that price? Would the subsidies for farmers be paid out directly by Malta? Would the subsidies for farmers be aimed at bridging the difference between local product prices and the lower prices of EU produce, for tomatoes for example? Would these subsidies be based on volume quotas?

Would the declarations on Malta's neutrality and on abortion be made unilaterally by Malta and then they would be noted or accepted by the EU or would they be a joint statement by Malta and the EU?

Would the seven-year transitional period on the imposition of VAT on food and medicine be automatically extended if VAT on those two items would have still not been imposed by Britain and Ireland?

Replying, Dr Fenech Adami said that in terms of a document he was tabling, the EU had made a commitment in its budget for 2004-2006 to allocate 2371.3 million (Lm154.7 million) to Malta. Malta's contributions to the EU during that period would reach 2177 million (Lm73.7 million) which meant that Malta would have a net benefit of 2194.3 million (Lm80.9 million).

Dr Fenech Adami said long and detailed negotiations had been held on ways how to ensure that agriculture in Malta remained economically viable and farmers continued to enjoy their current standard of living, or better.

Malta had proposed a system of assistance to farmers as had already been explained in the House. Payments to farmers would be a commitment on the Maltese budget but that had been considered in the final financial package negotiated with the EU.

Turning to neutrality, Dr Fenech Adami said that during the negotiations the EU never raised any difficulties about Malta's constitutional status of neutrality and Malta never saw the need for a derogation or transition period. However, so as to satisfy the doubters, Malta insisted that there should be a declaration by the Maltese government saying that neutrality was not in conflict with Malta's obligations in the EU.

As for abortion, while it was well known that the EU did not have competence to legislate in this area, the government felt that in order to satisfy the ecclesiastical authorities and others, there would be a protocol between Malta and the EU which recognised the supremacy of Maltese law in this sector.

Concluding, Dr Fenech Adami referred to the transition period on VAT. He said the Maltese government would be under no obligation to introduce VAT at five per cent on food and medicine before January, 2010. If, by that date, harmonisation in this area would not have come about within the EU, the Maltese government would have the right to raise the issue once more with the EU. Furthermore if VAT was to be introduced, the government of the day may take compensatory measures to ensure that the introduction of VAT would not affect consumer prices.