Malta makes net gain from EU

Malta has ended up with a significant positive financial balance during its first four and a half years as an EU member, according to figures obtained by The Times and confirmed by European Commission officials.

The figures contradict recent claims made by Labour Leader Joseph Muscat who said the government was not managing its EU funding allocations well.

Labour's claims were quashed by Richard Cachia Caruana, Malta's Permanent Representative and one of the people who led the government's negotiations on the 2007-2013 financial package that netted Malta €855 million.

Asked for the amount Malta has received since it joined the EU and how much it has contributed to EU coffers, Mr Cachia Caruana provided figures which show the island received more than €209 million over the amount it contributed by the end of last year.

"The facts do not bear out what Dr Muscat has been saying," Mr Cachia Caruana said when contacted.

The figures (see table) show that between May 2004 and December 2008, Malta received €462,695,497 in funds and paid out €253,567,518 as its contribution.

These funds do not take into account the total allocation to Malta made by the EU for this period. According to the rules, more funds will be transferred in the coming years once the receipts of ongoing projects, under the Structural and Cohesion Funds, are presented.

Earlier this month, Dr Muscat claimed that the government was mismanaging EU funds and said the island was ending up paying more into EU coffers than it received.

Dr Muscat said that from Labour's calculations for the past two years (2007/2008), Malta had paid €12.6 million more to the EU than it received.

The government's figures, which have also been checked by the Commission, show that even looking at just the two years indicated by Dr Muscat, Labour's figures were wrong.

Taking only those two years into consideration, Malta received a total of €143 million and paid €117 million, leaving the island with a net balance of €26 million - €38 million more than the figure claimed by Dr Muscat.

Reiterating EU Regional Policy Commissioner Danuta Hubner's recent positive comments about Malta's track record, a senior Commission official, monitoring the use of EU funds by Malta, told The Times the Commission was very satisfied with the way Malta was managing its funds.

"It is clear Malta has learnt the rules of the game very quickly in the past years. It is one of the best member states where it comes to the absorption of EU funds. During its first eligible funding period (2004-2006), Malta's absorption rate is more than 90 per cent," he said.

"It is also managing to put its projects for the current budgetary allocation (2007-2013) on the fast track and was the first EU member state to have its plans approved by the Commission last year."

The EU budgetary rules are quite complicated although very well defined. According to the financial procedures, Malta had until December 2006 to request the EU for payment of the 2004 allocation; until the end of 2007 for the 2005 allocation; and until last December to request funds allocated for 2006.

In the light of the current economic crisis the Commission had just approved an extension of the eligibility of this expenditure until next June.

For the 2007-2013 programming period, the second EU budget applicable since Malta joined the EU, the island was allocated €855 million in Structural Funds of which €112 million were allocated for 2007 and €115 million for 2008. Malta has until the end of 2010 to spend the money for 2007 and until the end of 2011 to claim the 2008 allocation.

Besides these funds, Malta was also granted extra EU funds for, among others, agriculture, fisheries and justice and home affairs, boosting its total allocation so far to €1,069 million. The latest addition was €112 million allocated under the European Refugee and External Borders Funds to help the country better tackle illegal immigration.

Malta is currently taking part in discussions at a Council level for the allocation of funding for its electricity connection with Sicily with a €20 million grant now being earmarked in a revised Commission proposal. Malta had originally been allocated just €6 million and the increase came following intensive lobbying by the government, including the direct intervention of Prime Minister Lawrence Gonzi and a series of meetings held by the Permanent Representation in Brussels.