Malta risks losing EU funds

Data released yesterday could mean Malta loses its Objective 1 status for the purposes of structural and cohesion funds under the European Union's 2007-2013 budget.

The statistics, issued by Eurostat, the EU's statistical arm, shows that Malta's GDP between 2000 and 2002 was 75.9 per cent of the EU average.

Objective 1 status entitles EU member states and regions to qualify for the most generous funds within the EU. To be eligible for such aid, they must have a GDP of 75 per cent or less of the EU GDP average.

Sources close to the European Commission pointed out to The Times that Malta could well lose its Objective 1 status for the next budget. However, it is considered to be "unusual" for the EU not take into account the statistical data for 2003. However, the sources added, this was proving to be difficult at the moment as certain member states have not yet presented their complete regional data for 2003.

Sources close to the Maltese government said Valletta has been following the issue closely for the past year and had in fact alerted the Commission about the possibility of the island's GDP exceeding the EU's GDP average for the period 2000-2002.

The government is insisting that the EU takes Malta's 2003 data into consideration as GDP results published by Eurostat at the end of last year, taking into account data covering 2003, showed that Malta was eligible to retain its Objective 1 status.

In fact, those statistics, calculating the average GDP between 2001 and 2003, showed that Malta had an index of 75 per cent of GDP per capita in purchasing power standard (PPS) when compared to the average of the 25 EU member states. This means that Malta just manages to make it through to Objective 1 status.

The government sources insisted that Malta would not accept losing its Objective 1 status under the next budget.

The next EU budget will have to be agreed by all member states in order to be approved.