22 June 2005


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Malta’s EU funds in the balance

Karl Schembri in Brussels
Malta and the other nine new EU member states are bound to postpone some of their much-needed projects to be financed by the bloc they joined just over a year ago, in a crisis that is expected to have political repercussions all over Europe.
In Malta’s case, up to 700 million Euros to be spread between 2007 and 2013 will remain suspended until the EU leaders agree on the budget – the source of a disastrous European Council summit last Friday following an equally catastrophic meeting on the European constitution.
After a thorny battle to keep its Objective One status in March, Prime Minister Lawrence Gonzi went for last week’s summit convinced that the proposed budget would have secured the maximum funds possible. His position around the decision table of European leaders was that Malta considered the budget package advantageous. It would have raised the share of EU funds on co-financed projects from 75 to 80 per cent, while other millions would have come in the form of structural and cohesion funds.
Other new member states from Eastern Europe, desperate for an agreement so that EU millions will get paid out to their poor regions on time, were outraged by Britain’s stubbornness.
EU President and Luxembourg Prime Minister Jean-Claude Juncker said east European states, led by Poland, had gone as far as agreeing to accept less money, in their bid to force a deal, but Britain’s Tony Blair turned down every proposal.
The crisis for Malta and the other one-year-old members becomes even more acute as Brussels bureaucrats point out it may take up to 18 months for EU funds to be transferred, only after an agreement is reached.
Next week, Britain will take over the EU presidency – the most impossible role at the moment following its confrontational stand in last week’s summit.
“For Malta it was very important that a deal is struck because in the absence of such an agreement Malta now cannot plan its projects financed by the EU,” Gonzi said. “Whether it is more or less possible to reach an agreement now (under the British presidency) I cannot say, but definitely the efforts will continue from all sides.”
As the Brussels-based EUObserver notes about Tony Blair’s chairmanship of the European Council as of July 1, “it will be tough for his presidency to return to the question of the EU budget given Britain’s role during the summit – meaning that it will only be dealt with during Austria's watch in the first half of next year.”
But funding apart, the very foundations of the enlarged union of nation states have been rocked since last week, as a crisis of European identity is facing the new states so early in their membership.

Gonzi’s nightmare
Last week’s catastrophic summit has plunged Prime Minister Lawrence Gonzi into a crisis that is set to intensify with every month that passes without an agreement.
His rash decision to ratify the European constitution next month will only make it worse, as the Maltese parliament will be rushed to approve a document that has been dumped unceremoniously by the people of France and the Netherlands.
That in itself is bound to stir unprecedented unpopularity as the Maltese government, with the complicity of the Opposition, will be seen as losing its time on an unwanted and, by then, irrelevant chunk of words, when the country’s priorities lie evidently elsewhere.
The very Euro millions promised to Malta are now suspended and so the government cannot plan its future projects, leaving Gonzi without his ‘extra’ budget from Brussels before the next general election.
Some of his Cabinet ministers will be quick to blame the EU budget disagreement for their failed promises and incompetence, but less and less people will buy it.
The problem is not that the budget disagreement will not effectively hit us badly. It will, as funds promised will fail to materialise, or at a much later stage than expected. But with the EU referendum frenzy buried for good, the front liners of the membership cause will be faced with the reality of a Europe not only enlarged but also a continuously mutating Europe that resembles little or nothing of what they were promised.
The pathetic showdown between France and Britain last week is already a huge disappointment. When it comes to the home front, the first tangible effects of membership are directives, some imposed from Brussels, others wrongly perceived to be so, without any of the ‘European’ breath of fresh air that a good part of the level headed electorate was expecting since May 1 last year.
Heading the party that steered Malta into Europe, Gonzi will have to go beyond keeping up appearances to convince the people he is the right leader of the right party in government in the months to come. Both Juncker and European Commission President Jose Manuel Durao Barroso have described the mood around the European leaders’ table as one of “crisis and paralysis”.
Perhaps for the first time, never have the Maltese felt so close to the sentiment at the heart of Brussels.
karl@newsworksltd.com



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