Parliamentary Secretary Aaron Farrugia (above) has insisted that the government did not need to make use of the European Fund for Strategic Investment (EFSI) in Gozo given that the country’s financial stability despite the crisis of 2008 meant a capital injection through loans was not necessary, maintaining that the 10% structural funds allocated to the island was more than enough.
Farrugia was approached by The Malta Independent after PN MEP candidate Peter Agius (below) criticised the government for failing to capitalise on the EFSI saying that Malta placed second last from countries who made use of the currently 13 billion euro fund, using just 12 million euros.
"The EU is offering us the tools to modernise Malta once again, to rise up to the challenge of an oversize population using an undersized infrastructure. The European Strategic Investment Funds could trigger a much more secure private participation for large scale projects in Malta such as an underground transport network or investments to strengthen port infrastructure. We cannot afford to be at the bottom of the graph on this,” Agius said.
He also insisted that Gozitans should be involved greater in its own decision making process especially given the issues facing youth employment in Gozo and the possibility of a permanent link.
In comments to The Malta Independent, Farrugia noted that the EFSI was introduced to overcome the current investment gap in the EU by mobilising private financing for strategic investments, following the international financial crisis in 2008.
The fund, known as the Juncker fund, does not provide grants but provides assistance using various financial instruments, in particular, European Investment Bank loans and guarantees.
“Our country did not need to use the fund, we did not massive problems after the financial crisis, and we did not have a cash flow issue or a lack of investment from both the public and private sector,” Farrugia said.
“One also needs to note that the fund is mostly used by private investors. The private sector in Malta felt it did not need to pursue certain loans as Maltese banks continued lending. Unfortunately, it is hard to find Maltese investors to pursue the fund as the EFSI is chiefly used for million euro large-scale projects,” he continued.
Asked to comment on Agius’ claims that the government failed to recognise Gozo’s autonomy and involve the island in the decision-making process behind the allocation of EU funds, Farrugia said:
“Positively, both the current and preceding administrations decided to allocate 10% of all structural funds to Gozo. This does not mean it just receives that 10 %, but that it is ring-fenced for use in Gozo. Over and above that citizens and entrepreneurs in Gozo can also make use of a number of funds, for example, the ECF, in the digital sector, in the aid of vulnerable persons.
“I believed that 10% is a lot, as a matter of fact, we are trying to see how Gozo will be able to absorb the entire 10% that is allocated.”
In a statement this morning, Labour MEP Alfred Sant was more in agreement with Peter Agius than with Farrugia when he explained his vote at the European Parliament.
The truth is that under current rules, EU islands like Gozo stand no chance of benefitting from the Juncker plan for investment, Sant said when voting in favour a resolution on boosting growth and cohesion in EU border regions at the European Parliament.
Sant's explanation of vote focused on small island border regions – specifically Gozo – and their difficulties, foremost about the difficulties to absorb EU funding.
“This is not for national reasons but due to the ways by which EU programmes are designed and structured. It is therefore essential that the requirements of peripheral regions, especially small islands like Gozo, are embedded into the planning of such funding programmes.”
Sant said that insular regions encounter huge difficulties when trying to access, let alone, absorb EU funding.
“I voted in favour of this resolution because it highlights genuine concerns about the disadvantages that burden border regions compared to other European regions. Despite the geopolitical and economic importance of EU border regions, they experience various obstacles in both structural terms, as well as when it comes to get the right regard within EU policy structures – especially when very small islands are concerned.
"I have in mind the island of Gozo, which is the second largest island of the Maltese archipelago. Islands like Gozo must not only overcome the usual legal and administrative barriers of other cross-border regions. They also face physical obstacles directly affecting the flow of the most basic products and services,” Dr Sant told the European Parliament.
The Resolution - adopted with 594 votes in favour, 58 against and 35 abstentions – refers to internal border regions which generate a quarter of EU GDP representing 40% of the EU territory where 150 million Europeans live. These regions however face obstacles which hamper their growth, such as legal and administrative barriers which translate into legal uncertainty (e.g. social security issues, recognition of diploma or qualification requirements) for border workers and employees, or insufficient transport network.