Finance Minister Edward Scicluna has continued to raise questions about the way a €750 billion EU COVID-19 recovery fund will be financed.

Scicluna described the fund in parliament on Wednesday as a “prickly pear”, warning that new EU-wide taxes could be introduced to finance it.

Speaking to Times of Malta, Scicluna clarified that the government is in favour of a recovery fund and has already approved it in principle, together with three other funds.

“We will discuss, negotiate and finally approve a package which is in the national interest,” he said.

Malta is expected to be eligible for €350 million in grants and €642 in loans, payable by 2058.

We will approve a package which is in the national interest

He said there was little doubt that the programmes for which grants or loans were voted would benefit the EU overall.  Scicluna said the issue which needed to be answered was how the fund was going to be financed.

The Finance Minister said asking for guarantees for borrowing to take place gets complicated if these are mutualised, as countries may become jointly and severally liable for those debts.

If the borrowing on the world’s financial markets was done on the same principles of the European Stability Mechanism, this would be acceptable.

He warned the European Commission may have many “interesting ideas” of how to raise money on its own steam.

“Open the cupboard and remove the dust you will find a financial transaction tax, a common consolidated corporate tax base, a minimum corporate tax, a digital tax, a tax on air tickets or cruises, which hits Mediterranean countries more than others as an emission tax.”

The minister said that ironically, all these taxes are the worst remedy for an economic recovery.

“The cherry on the cake is to that get these old ideas through, since they have been opposed by a sizeable group of member states, majority voting will be pushed to replace unanimity.”