Former PN MEP candidate Peter Agius said Malta will be facing “a monumental challenge in the coming months” as it aims to recover from the effects of the Coronavirus pandemic with the financial assistance of the European Union.

It is proposed for Malta to receive close to €1bn in loans and grants through a package proposed earlier this week.

Speaking with The Malta Independent, Agius described the recovery plan as a “prickly pear that needs to be peeled strategically to get the best out of it for the benefit of businesses, SMEs and workers who are in difficulty because of Covid-19.”

This seems to be in clear reference to Finance Minister Edward Scicluna, who had described the EU rescue package as "a fruit that can be a prickly pear."

Scicluna warned that "one has to look into how the money will be given as aid for the post-pandemic. We need to analyse the money that will be given and what will be given in loans." He said that "we need to know who will eventually pay for the debt as we cannot be in a situation where we borrow more to pay off the loan."

Agius explained how between the lines and in the annexes of the European Commission's €750 billion euros proposal (for all the EU), announced by the President of the European, “one finds the monumental challenge that Malta has to face in the coming months. The European Commission is in fact proposing that this money should be paid not from GNI contributions but from European direct taxes.” This may seem like a small technicality but according to Agius it may make all the difference for Malta.

“If we do not succeed in negotiating different sources for fresh EU funding, we will end up paying them ourselves from the taxes that are imposed on Malta-based companies.”

“The Minister's reaction is worrying to me because he seems to be already admitting a walk-over, when the negotiating match in Europe has started the second half - where the proposal has to be negotiated in the Council of Ministers and then by Prime Minister Abela. The government should not come with excuses from now on, but should present the needs of Malta and Gozo which especially due to tourism should be considered as a 'net beneficiary' and not a contributor as it is may end up according to the European Commission proposal.”

He said that Malta needs to convince Europe to focus on fresh sources of EU funding with lesser impact to Malta’s economy. “If not we will end up paying EU funds from taxes imposed on Malta-based companies.”