Largest ever allocation earmarked for Malta, with €2.25 billion in EU funds

by Gozo News · July 21, 2020

Following the longest and most intense negotiations on the EU Budget in Brussels, the Government said that Prime Minister Robert Abela has negotiated a package worth €2.25 billion for Malta for the next seven years.

At the end of the summit The Prime Minister described the agreement as an “exceptional result and noted that this is the largest ever allocation for Malta,” with six special allocations. A minimum of 10% of the allocation under Cohesion Policy and Agriculture will be earmarked for Gozo.

The Prime Minister said that the funds allocated to Malta for 2021-2027 are much higher than those obtained in February 2013 for the period 2014-2020.

The Government in a statement explained that this includes €1.923 billion from the EU’s budget (core MFF), as well as €327 million from the grants of the newly established Recovery Instrument, known as Next Generation EU. This amount does not include the loan element.

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.

Furthermore, Malta’s economic growth means that its GDP per capita compared to the EU average has improved remarkably over the last seven years.

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 deal concluded at this special meeting of the European Council means that Malta has secured a total of €842 million in funds under the core Cohesion Policy, the Government said.

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.

The Government said that 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. It explained that, “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.

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 Prime Minister thanked all those involved in the months of complicated and very difficult negotiations that led to Malta’s final package, emphasising that the Government will do its utmost so that today’s outcome is translated into programmes and projects o consolidate further investments in our economy and citizens.

[1] The special (additional) allocations: €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). A further special allocation of €50 million for Rural Development; and two special allocations under the migration and border management funds increasing the fixed amounts to €25 million each.

[2] The special (additional) allocations: €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). A further special allocation of €50 million for Rural Development; and two special allocations under the migration and border management funds increasing the fixed amounts to €25 million each.