Malta is set to receive more than €2 billion in EU funding over the 2021-2027 period, following negotiations among EU leaders which were successfully concluded on Monday night.

The allocation combines just over €1.9 billion in funding allocated to Malta from the EU’s core budget – its multiannual financial framework (MFF) – which was up for renewal, as well as €327 million granted as part of a coronavirus stimulus package. 

During the EU’s previous budget round, for the 2014-2020 period, Malta was allocated €1.1 billion in funding through the EU’s budget and had to pay €501 million in contributions. 

This time round, Malta will contribute more than double that amount but will also receive more money from the EU's various funding streams. Cohesion funds, designed to reduce regional inequalities within the EU, will continue to provide the lion's share of funds. 

The deal means Malta is on track to receive around €590 million more than it contributes to the EU budget. The previous MFF for the 2014-2020 period left Malta with €627 million in its pocket, once contributions were deducted.

But Malta's coffers will now be also be boosted by the aforementioned €327 million coming the country's way as part of a COVID-19 stimulus package.

Prime Minister Robert Abela hailed the negotiated deal as the largest-ever package handed to Malta and claimed that it was “double” that negotiated back in 2013. 

Those claims must be put into context.

While Malta is getting a bigger slice of EU funding, it is a slice from a bigger overall pie – one worth €1074 billion over seven years, when compared to the previous €960 billion one.   

The €2.25 billion allocated to Malta also includes almost €400 million given to a Malta-based office that does work for the EU as a whole, not just Malta, as well as money from funding instruments that did not exist the last time the EU budget was being negotiated. 

What Malta will pay into the EU budget

Malta is projected to be one of the EU’s best performers when it comes to surviving the economic fall-out of the pandemic, and the country has rapidly risen up the EU’s economic growth tables in recent years.

That strong economic performance will be reflected in Malta’s growing contribution to the EU’s budget, which is automatically calculated based on gross national income.

Malta is expected to contribute €1.2 billion to the EU’s budget over the next seven years – more than double the €501 million it contributed in the previous years.

EU member states will also contribute to repaying loans the European Commission will take out to finance parts of its coronavirus stimulus package. The loans will be financed between 2028 and 2056 by member states and Malta will be forking out €15 million a year, on average, to cover these costs.

How Malta's balance sheet looks

The country will continue to be a net beneficiary of EU funds.

In its press release, the government indicated that Malta will end the funding period with a net balance of €1 billion – €132 million better than what was expected back in May, when the Commission unveiled its final proposal. 

That €1 billion net balance figure is arguably slightly deceptive, as it includes a €386 million allocation to the European Asylum Support Office, which is based in Malta but operates on behalf of all member states, and €59 million in administration funding.

When those figures are deducted from the €1 billion total, Malta ends up with a positive balance of €590 million.

Deduct a further €327 million in coronavirus economic recovery funds, and Malta is left with a net positive balance of €263 million from the EU’s 2021-2027 MFF. 

Where will Malta receive funds?

Cohesion and agriculture

The lion’s share of Malta’s allocation will come in the form of cohesion funds, which are EU funds intended to reduce economic disparities between regions. Malta stands to receive €934 million in such funding and €191 million in funding for agriculture.

€101 million of this combined cohesion policy and agriculture allocation are from the COVID-19 recovery package.

The allocation is €260 million more than was first proposed for Malta back in May and represents a €211 million increase from the 2014-2020 period.

During that budget round, the EU had allocated Malta €776 million for cohesion policy and €138 million for agriculture.

Migration, education, fisheries

Malta’s allocation for migration, borders, security, education, and fisheries for the seven-year period totals €276 million. This is actually €43 million less than was first proposed for Malta by the Commission two months ago. 

The figure is €156 million more than allocated to Malta in the previous EU budget, when Malta was given €120 million.

There are no COVID-19 recovery funds allocated for this section. 

Research, environment

On strategic investments, research and innovation, and the environment, the funds reach €162 million, of which €16 million are from the post-virus stimulus package. This, again, is €40 million less than what was first set out for Malta back in May.

Back in 2013, Malta had received €94 million for an equivalent instrument, “Connecting Europe”, research, and the environment.

Single market, recovery and resilience

Malta has been allocated €242 million from a fund aimed at “recovery and resilience”, the single market, and “European values”.

The bulk of this, €210 million, comes from the pandemic recovery package. Malta’s allocation is €56 million less than the amount first earmarked for the island by the commission. 

When combined, funding in these four categories reach a total of €1.8 billion over the seven-year period.

€327 million of that amount come from the coronavirus recovery instrument the EU has negotiated - €120 million more than the figure estimated back in May. 

The EU also allocates funding for administration, with Malta getting €59 million here. This is €1 million less than forecast last May. 

The European Asylum Support Office, which is headquartered in Valletta’s Grand Harbour, will receive a €386 million funding allocation.