Malta has obtained €2.25 billion in EU funds from the newly struck deal between all EU countries in what the Prime Minister described as the “biggest allocation of EU funds” on Tuesday morning.

After a mammoth four-day summit in Brussels, the 27 EU countries agreed on an unprecedented €1.8 trillion budget - €750 billion of which is a dedicated Coronavirus fund, and the remaining €1 trillion or so being the EU’s next seven-year Multiannual Financial Framework (MFF).

In a social media post early on Tuesday, the government said that Malta had obtained the biggest allocation of EU funds in its history.

Although no figures were initially given, a government statement later revealed that Malta had negotiated a package worth €2.25 billion for the next seven years.

This is double the €1.1 billion secured for the period between 2013 and 2020 after talks negotiated by then Prime Minister of a Nationalist Party government Lawrence Gonzi in 2012.

Malta’s package includes €1.923 billion from the MFF, and a further €327 million from the grants of the newly established recovery instrument known as Next Generation EU – an amount which does not include the loan element.

When factoring in the €1.2 billion that Malta pays to the EU, it means that Malta will receive a net amount of €1.035 billion from the EU.

 

“The deal is even more important within the context of the withdrawal of the second largest net contributor to the EU Budget. The withdrawal of the United Kingdom from the European Union after almost 50 years will lead to a loss of €75 billion to the Union budget during the next seven years”, the government said. 

The government said that during the meeting and in its margins, the Prime Minister held discussions with the President of the European Council and other Heads of Government to explain the specific issues pertaining to Malta, explaining that despite its strong economic performance in recent years, Malta, as a small island Member State, has unique challenges that are different from those of other Member States. 

“Heading into the negotiations which spanned over 5 days, the Prime Minister stressed that Malta should not be penalised for its efforts in recent years to keep unemployment low”, the government said. 

The deal means that Malta has secured a total of €842 million in funds under the core Cohesion Policy. 

This amount, that does not include a further €92 million additional  funds for ReactEU (Cohesion Policy) from the Recovery Instrument, is at least €66 million more than what Malta obtained in February 2013 for the 2014-2020 Cohesion Policy.  

For agriculture, Malta obtained €191 million - €53 million  (or 38%)  more than in 2014-2020. This was possible due to a special allocation secured by Prime Minister Abela that was granted to Malta to support efforts in this area.

In total, under the traditional EU policies of Cohesion Policy and Agriculture, which account for around 60% of the total EU Budget, Malta obtained €1.125 billion, compared to €793 million that it would have obtained under the Commission’s proposal of 2018. 

The Government said that it has decided that a minimum of 10% of the allocation under Cohesion Policy and Agriculture will be earmarked for Gozo. “This will ensure that Gozo receives more funds overall than it currently has ringfenced under the 2014-2020 financing period.” 

Other key instruments and programmes for Malta include Erasmus+; migration, borders and security funds; and environmental programmes. 

Overall, the indicative allocation which Malta will receive under the 2021-2027 MFF is estimated to be €1.923 billion. This not only compares well with the deal of February 2013 for 2014-2020 but is actually €795 million higher. 

Over and above, Malta will benefit from €327 million in grants from the Recovery Instrument to assist in the recovery effort. The Government also has the option to access the loan element if it wishes to do so. 

The special allocations secured are €200 million in Cohesion Policy (€100 million for Island Member State, €50 million for growth and jobs and €50 million from ReactEU to address COVID 19 related expenditure), along with €50 million for Rural Development; and two special allocations under the migration and border management funds increasing the fixed amounts to €25 million each. 

Own resources paid to the EU budget are automatically calculated on the basis of the relative economic development of Member States. Despite Malta’s strong economic performance in recent years, this excellent package means that Malta’s net balance from the EU budget will also remain significantly positive for the coming years, the government said.