Malta and the other nine member states that acceded to the European Union in 2004 could stand to lose out on unutilised funding available to them if the funds are not spent by the year’s end, Financial Programming and Budget Commissioner Dalia Grybauskaite warned yesterday while presenting the financial report for the EU’s 2006 budget yesterday.
The budget commissioner underscored the fact that the so-called ‘EU10’ could lose out on EU funding if they had not managed to use their full funding allocations within two years after the funds were made available.
This year for the first time, money available from structural funds remaining unspent by the member states they are intended for could be automatically cancelled under the EU’s new ‘n+2’ rule.
“No excuses will work here and there will be no exemptions for countries,” she added.
At 69 per cent, Malta had spent the highest amount of its structural funding allocation between 2004 and 2006 as compared with other EU10 member states, which had an average of 57 per cent.
Referring to the 2006 budget, Commissioner Grybauskaite commented, “This was globally a positive performance for new member states as all of them received more money from the EU budget than in 2005.
“Yet, they need to do better this year, especially in the cohesion policy.”
Over 2006, expenditure from the EU budget allocated to Malta was the block’s third-highest figure in terms of gross national income (GNI) – just behind Greece and Lithuania. Allocations to Malta from the EU last year amounted to 3.25 per cent of the country’s GNI. Allocations for Greece and Lithuania stood respectively at 3.59 per cent and 3.45 per cent of GNI.
“Absorption levels are not satisfactory and time is running out,” the commissioner remarked yesterday, urging governments in the EU10 to step up their administrative procedures so they could make the most of available EU funds before they expire at the end of the year.
Speaking recently, Finance Ministry Parliamentary Secretary Tonio Fenech said by June 2007 Malta had absorbed 23.2 per cent, or just over EUR4.9 million (Lm2.1 million), of the EUR22 million (Lm9.44 million) in cohesion funding made available to the country. Malta’s 2004 to June 2007 absorption rate, meanwhile, stood just above the 22 percent EU10 average cohesion funding absorption.
Post June 2007, Malta has secured another EUR5.6 million (Lm2.4 million) – bringing Malta’s cohesion funding absorption rate up to 48.8 percent.
In terms of both cohesion and European Regional Development Fund (ERDF) funding, Mr Fenech said that funds had been committed on projects that were already in hand and which were to be completed by the year’s end, meaning the funds spent on the projects would be refunded.
Malta has so far fared much better in the EUR46.7 million (Lm20.05 million) in funding allocated under the ERDF. By June 2007 Malta had absorbed 45.4 percent of such funding, while the figure for post June 2007 rises dramatically to 71.2 percent.
In terms of total structural funding between 2004 and 2006, Malta had used 69 percent of what has been allocated – leading the EU10 and standing above the EU10 average of 57 percent. At the other end of the scale, Cyprus had utilised just 41 percent of its allocated structural funding.
In addition to the ERDF, structural funding also includes funds from the European Social Fund, the European Agricultural Guidance and Guaranteed Fund and the Financial Instruments for Fisheries Guidance.