Although the monitoring board set up by the government to vet state aid in Malta to ensure it complies with EU regulations on competition and the free market concluded that "if the EC Treaty is followed accurately, state aid given to Church schools should be notified..." it decided to communicate to the Archbishop's delegate that "the subvention to Church schools does not constitute notifiable aid". The board also decided not to tell the Archbishop's delegate that "... this situation may change in the future".
The state aid monitoring board had looked at the state aid the government gives every year to Church schools after it received a query in a letter dated July 27, 2000, by Fr Dominic Scerri, the Archbishop's delegate for Church schools.
The letter was addressed to the Ministry for Economic Services. In his letter Fr Scerri requested information regarding the notification of state aid received by Church schools.
The state aid monitoring board concluded that whereas public funds given to the Church schools till the end of 2003 are to compensate for the Church property transferred to the state, funds given to Church schools after 2003 will become state aid that has to be notified to the EU Commission.
The government has tried to brush aside the issue by saying that the governments of EU member states give public subsidies "to Church and private schools". But the government did not say in its press release that in Malta the government gives subsidies to Catholic Church schools only. In fact, the state aid monitoring board had examined the situation in Austria and Germany where public subsidies are given to Church and private schools without any discrimination.
The board saw that the situation in Malta is different as public subsidies are given to Catholic Church schools only.
The board concluded that since Church schools receive state aid they "are able to provide a service free-of-charge to their students whereas students in private schools would be expected to pay a fee. It seems that competition is being distorted in the market".
The state aid monitoring board considered the issue by looking at the state subsidies to Church schools within the context of the two agreements reached between the Holy See and the Republic of Malta. One of the two agreements states that tuition fees may be charged to non-Maltese students. The board concluded that this is incompatible with EU regulations as EU students cannot be discriminated against and as long as Maltese students are not charged a tuition fee the same would apply to EU students.
This means that when it comes to admitting students to Church schools, children from EU countries residing in Malta and Gozo would have the same right to attend Church schools without paying any tuition fees and they would compete for a place in a Church school on the same footing as Maltese children.
On behalf of all present and future members, the European Union is currently negotiating with the World Trade Organisation (WTO) the General Agreement Trade in Services (GATS) which for the first time includes educational services.
According to these new WTO proposals, the Maltese government would have to decide: either stop the state subsidy to Church schools or extend the subsidy to all private schools operating in the country, including those that are foreign-owned.
Mr Bartolo is the Labour Party's spokesman on education