Ministers have approved a national plan of how to spend €320 million in EU funding to help the country rally following the COVID-19 pandemic. 

Cabinet agreed to the plan on Monday after receiving a detailed presentation of how the government intends to spend EU funds forming part of its Recovery and Resilience Facility. 

The plan must now be approved by the European Commission before the grants that form part of a broader EU-wide €672 billion aid package - can be disbursed.  

Green spending 

Malta was originally allocated €242 million from that fund, although that figure has been increased to €320 million. 

Under EU rules, 37 per cent of funds must be spent on green initiatives, with a further 20 per cent allocated to digital projects - €118 million and €64 million respectively in Malta's case. 

Sources told Times of Malta that the national plan allocates almost half of its €320m total to green initiatives.

What will funds be spent on?

The full recovery fund will be spent on six areas agreed on with the European Commission earlier this month.

These are the circular economy, decarbonisation, digital investments, educational initiatives, social policy spending, and investing in upgrading Malta’s institutions. 

Sources said the funding program will finance some 17 major investment projects earmarked for the coming months. 

Tough negotiations at EU level

Malta is one of the last EU member states to have finalised its funding plan. 

Member states were invited to submit plans by the end of April, although the Commission has noted that April 30 was "an orientation date, not a deadline” and that plans can be submitted until the middle of 2022.

Sources said the European Commission has been in intensive discussions with Malta as it prepared its plan, which must satisfy green and digital criteria, as well as challenges identified in the Commission's relevant country-specific recommendations for 2019 and 2020. 

Malta's taxation system was a particular point of contention, sources said. The EU had said in its 2020 recommendations for Malta that it wanted the country to "step up action to address features of the tax system that facilitate aggressive tax planning by individuals and multinationals." 

Details of Malta's funding plan will be given to social partners on Wednesday and then made public in parliament that same day, EU funds junior minister Stefan Zrinzo Azzopardi told parliament on Monday.