The Malta Independent 4 June 2020, Thursday

TMID Editorial: EU funds - Malta set to lose

Tuesday, 25 February 2020, 08:45 Last update: about 4 months ago

A European Council summit convened last week ended without an agreement on the raising and distribution of the European Union’s funds for 2021-2027.

The leaders’ positions are so far apart that they could not even decide when to meet again. No specific date has as yet been set for another meeting on this particular matter, meaning that so much work needs to be carried out until the heads of government could sit around the same table again.

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After 28 hours of talks, no compromise was reached, with the wealthier member states insisting they do not want to cough up more funds for the bloc's next long-term spending package, worth around one trillion euros.

Even if a trillion euros sounds like a lot, it amounts to just 1% of the gross national income of the 27 member states combined.

The balance that needs to be found is tricky. On the one hand, European leaders must commit to policy ambitions but at the same time they cannot give the impression that they are splashing out taxpayers’ money without careful planning.

Beyond the problems of seeing to the different needs of the rich and poorer member states, the departure of Britain, which was a high contributor to the EU coffers, added to the difficulties. With Britain gone, there is a sizable budget hole — about 75 billion euros over seven years.

The so-called “Frugal Four” – Austria, Denmark, the Netherlands and Sweden – say that the EU’s 2021-2027 budget, earmarked to also fund policies related to climate change and digital economy, should amount to 1% of the 27-nation trading bloc's gross national income.

On the other hand, the poorer member states, backed by the European Parliament, would prefer a bigger budget of 1.3 per cent. And so, to put it in a simplistic way, the debate is over some 0.3 percentage points.

Long arguments over the seven-year budget are almost a tradition in the EU, and ways out of the impasse are always eventually found. There was always a need for two or three summits to resolve the issues. It is hoped that the same will happen this time round too.

But there is a deadline. Unlike what happens on a national level, the EU’s budget cannot be rolled over onto the next seven years based on the terms of the previous seven-year package. So an agreement is necessary.

The whole budget process for the period 2021-2027 was initiated almost two years ago and the EU's executive commission had wanted it to be concluded by the end of last year, as the current budget period comes to an end the coming December. There’s still time, but not much.

Where does Malta stand in all this?

The previous allotment for Malta was negotiated by former Prime Minister Lawrence Gonzi, who led a team that “won” €1.128 billion for the 2014-2020. It’s an ironic twist of fate that the money was then spent by a Labour government with a leader, Joseph Muscat, who had vehemently opposed membership.

This time, there are doubts whether Malta could obtain that much money. Peter Agius, an expert in European Affairs, has said that from calculations made Malta will obtain €189 million less in structural funds, falling below the €1 billion line.

Agriculture is one sector in which Malta is set to lose the most, around €36 million according to Agius, which is over and above the €189 million previously mentioned.

Prime Minister Robert Abela has said that Malta will not budge on its agricultural requests. His being a newcomer to the table – along with two other new faces on the European tables, Foreign Minister Evarist Bartolo and parliamentary secretary Stefan Zrinzo Azzopardi – may make things harder around the negotiating table.

 

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