Issues of concern on Malta’s power in negotiations on its EU financial package for 2021-2027 raised by PN candidate Peter Agius were dismissed by the newly-appointed parliamentary secretary Stefan Zrinzo Azzopardi.

In comments to The Malta Independent on Sunday, EU veteran Agius expressed his preoccupation about the impact of the recent changes to the Cabinet when Malta continues its negotiations on its package of funds in the upcoming multiannual financial framework for 2021-2027.

But Zrinzo Azzopardi replied that the government is “following closely the technical and political discussions with the Presidency in order to ensure that the final compromise would be in Malta's best interest.”

The main issue, Agius explained, is that while negotiations in Brussels on EU funding are at a crucial stage, the portfolio for EU funds changes hands for the third time in three years.

Agius highlighted that in the coming couple of months, it is highly likely that the EU budget for the next seven years negotiations will be concluded, through which countries will have their allocated EU funds for the next seven years. There is a European Council scheduled for March, with a possible special meeting to be called in February.

Just recently, a new Prime Minister (Robert Abela) was elected through a PL Leadership election. Following this, a new Cabinet was appointed. Not only was there a change in Malta’s head of government, but also the minister and parliamentary secretary responsible for EU funds were changed, Agius said. He stressed that his concern is over the degree and the timing of the changeover of not just one, but three of the key negotiating actors at this stage in the game.

Agius explained that the Cohesion Fund, which is one of the funds within the multiannual financial framework, is particularly important to Malta, and through this fund major projects like the gas pipeline, the Gozo tunnel, or similar projects, could be funded. However Malta’s take from this particular fund is set for a smaller allocation for the coming seven years than the past seven, he explained.

This EU budget is fundamental, and includes allocation per policy area. Cohesion funds for example would mean funding for roads, infrastructure projects etc. There are other areas like for agriculture, defence, migration and others. “This is being negotiated right now and the Finnish Presidency put forward a document called the negotiation box, proposing the allocations in terms of how much overall funds each area would have.”

“There was already a proposed cut of around 10% in terms of the amount budgeted for the Cohesion Fund as a whole, so there will be fewer funds overall available. We need to pitch the case for Malta’s next step of development given the serious challenges to our infrastructure, be it roads, health services and utilities. We cannot accept a reduction of EU funds for Malta in this early stage of our EU membership. Many regions across the block retain favourable EU funding terms 40 years into EU accession.”

“It will be harder to make the case for Malta in the current scenario with rule of law concerns and a total change of actors on the negotiating table,” Agius said.

EU Funds over the past 15 years are directly responsible for most of our growth, he said.

Agius explained that the long-term budget presented by the Commission shifted public money to other areas which Malta could benefit, but is not yet ready to tap into, including the digital transformation agenda and defence, where Malta still abstains from cooperation in civilian projects including on cyber security which would be fruitful for the country.

“We made progress in terms of attracting companies with technology, but are not yet developing the technology on our shores. We need to make that transition and become the natural place to invest in terms of digital technology and not simply attract people who already have the technology and who come to settle in Malta for a good tax rate. That is where EU funds on R&D can play a role. So far we are at the very bottom of the graph for attracting R&D funding.”

“We need to make a quantum leap effort to tap into new EU funding chapters so far unexploited.  In terms of defence, we did not enter the Permanent Structured Cooperation in Defence due to our neutrality clause, although other countries which such a clause still opted in. In this, they are also discussing projects which are not military related, including investment in protecting a country from cyber terrorism for example. But we opted out, and without much of a discussion,” Agius added

“We are an oversized population for an undersized infrastructure, and our situation calls for more EU funds on Infrastructure and other areas, not less. I do not question the willingness of the new Prime Minister, EU Minister or EU Funds Parliamentary Secretary personally, but I am just concerned that, given that the picture already does not look so good, all three have changed a few weeks before they are expected in Brussels to negotiate the funding for our economy for the seven years ahead.”

“It seems to me that the whole changeover was done with a local reading and has disregarded the critical point in time for Malta to continue to reap the benefits of EU membership,” Agius concluded.

The Malta Independent sent a number of questions to the new Parliamentary Secretary for EU Funds, Stefan Zrinzo Azzopardi. Asked whether he has any concerns regarding Malta’s upcoming funds allocation, given that there is concern with regard to the change in PM, minister and Parliamentary Secretary, he said: "The position of Malta has always been that there must be a fair deal for each country in order to secure the effective finalisation of Multiannual financial framework negotiations. We feel that the Commission’s proposed level was a good starting point and we are following closely the technical and political discussions with the Presidency in order to ensure that the final compromise would be in Malta's best interest.”

Asked whether he is worried about the overall reduction in the Cohesion Funds available for the EU states, he said that Malta is a ‘Friends of Cohesion’ country “as we believe that cohesion funds have an important role to play in the realisation of the European project. One must appreciate the scenario we are in today, including the impact of Brexit on the size of the available funds for the post 2020 programming period. As was indicated earlier, it is critical that the compromise package reflects a good balance amongst competing objectives.”

As for whether he has any concerns for the upcoming Summit, he said that the forthcoming Summit is an opportunity for the Heads of State and Governments to give an added impetus to negotiations in order to reach a deal as soon as possible. “Although there remain differences between the positions taken by Member States thus far, it is important that the engagement continues so that we make notable progress towards the final compromise package.”

Zrinzo Azzopardi was also asked whether there has been, or will there be, any changes in terms of the team (excluding the minister and Parliamentary Secretary of course) working on getting EU funds to Malta. “You will appreciate that there are a number of people who have been working on this important dossier and I look forward to work with them and other, together with Minister Bartolo, in order for the Prime Minister to get the best possible deal for Malta.”