Maltese MEP secures backing for higher EU funding rate for islands

Maltese MEP Thomas Bajada has secured European Parliament backing for a proposal that would see Malta and other EU islands benefit from a preferential 75% co-financing rate under the EU’s next long-term budget.

Writing on Facebook, the Labour MEP said a report he had prepared and negotiated over the past months as rapporteur had received “strong support” in the European Parliament.

The report, he said, made the case that Malta and other European islands “cannot be treated in the same way as the rest of the continent”.

The proposal concerns the EU’s next long-term budget, covering the period from 2028 to 2034, and comes as Brussels negotiates the future shape of cohesion and other major funding programmes.

At stake is the rate of co-financing applied to EU-funded projects. In simple terms, this determines how much of an eligible project cost is paid for by EU funds, and how much must be covered nationally or by the project beneficiary.

Bajada said the report called for the next EU budget to recognise the “real and permanent” challenges faced by island communities by creating a preferential 75% co-financing rate for European islands.

He said this would mean Malta being treated at a 75% rate, rather than at the 40% rate proposed for developed countries such as Malta.

The report also introduces, for the first time, a dedicated chapter on the realities faced by islands, according to Bajada.

Speaking to Times of Malta, Bajada said he did not agree with GDP being used as the main yardstick for determining how much EU support a country should receive, although he acknowledged that GDP remains the metric used by the EU to calculate co-financing rates.

His argument is that GDP alone fails to capture the additional costs faced by island states such as Malta.

He pointed to major infrastructure and strategic projects that countries like Malta are required to carry out because of their geography, including energy interconnectors and logistics infrastructure.

These, he said, are not adequately taken into consideration when Malta is assessed simply as a developed economy.

Bajada also referred to the pressure Malta faces in the energy sector, including the need for subsidies to keep prices stable for families and businesses.

The European Commission and Council have repeatedly urged Malta to wind down broad energy support measures, arguing that they place pressure on public finances and weaken incentives for energy efficiency.

But Malta has argued that its small size, isolation from mainland energy markets and dependence on imported energy create specific vulnerabilities.

Bajada said the issue was therefore not simply one of EU funding formulas, but of recognising the structural disadvantages that island states face.

“Insularity brings with it real and permanent challenges for our families, workers and businesses,” he wrote.

“I will be making sure that what I negotiated and what has been approved comes into force.”

The proposal is not yet final EU law. The next long-term EU budget and the rules governing the new funding programmes still need to be negotiated between the European Parliament, the Council, representing member states, and the European Commission.

However, the backing obtained by Bajada gives Malta’s island-specific argument a stronger foothold in the parliamentary stage of those negotiations.

Bajada said the debate went beyond European funds.

“It is a discussion about our future, our quality of life and the opportunities we want to create for the generations to come,” he wrote.