Last Updated on Thursday, 2 February, 2023 at 11:23 am by Andre Camilleri
Last week, I was replying to a message on my social media page and suddenly a footage depicting the President of the European Commission, dressed entirely in black, spawned out of nowhere. At that point, I thought she was announcing something sombre, so I immediately clicked on the unmute button to listen to her message.
Thankfully, the President was announcing the European Commission’s preliminary positive assessment of Malta’s request for the disbursement of €52 million under the Recovery and Resilience Facility, termed NextGenerationEU. To give you some context, those member states benefitting from the NextGenerationEU’s grants must submit different milestones. Effectively, the milestones submitted by Malta showed significant progress in implementing the targets, as part of a broader reform including an investment agenda.
Amongst others, the milestones contain important measures such as the adoption of a strategy to decrease waste in the construction sector through the recycling of material, as well as to establish office spaces that would facilitate remote working for public sector employees. Furthermore, the milestones include the good work currently carried out for the implementation of the national strategy on the strict financial anti-fraud oversight, as well as the reforms to expedite and digitalise the justice system. Undoubtedly, this augurs well for foreign direct investment and the political stability of the country’s independence and robustness of the institutions.
Malta’s Prime Minister is an experienced lawyer, and clearly it was evident from the outset that he would be pushing to implement such reforms, in spite of the European Commission and the funds attached to the same reforms. Prime Minister Robert Abela believes in these reforms, so much that Malta proposed and submitted ambitious modifications, especially in the field of the justice sector. Undoubtedly, the current Justice Minister, is also aiding in implementing such a reform and his work was clearly acknowledged and endorsed by the EU institutions.
What annoyed me most, however, was the fact that to announce such disbursement of funds, the President of the European Commission took centre stage behind a podium claiming that she had good news for Malta. Indeed, it is good news. However, oddly as it might sound, the narrative to announce the disbursement of funds, is akin to the broadcast of the Eurovision Song Contest, and clearly it merits a revision. It reminded me of the anchors announcing the televoting points while the signers and performers are impatiently waiting for the results in the (ahem) green room.
Notwithstanding, that I fully concur with having a transparent system, as well as a performance-based budget attached to the EU funds, let’s recall that Malta contributes to the EU funds, too. Sometimes, I get the impression that we miss the point of mentioning our contribution to the EU’s own resources that cover for the annual budget expenditure. Back in the day, I witnessed multiple reports to reform the own resources system, including the famous Monti report. The latter proposed multiple revenue streams that the European Commission could explore to collect additional own resources.
Until recently, there were three types of own resources, one termed as traditional, primarily comprising of customs duties on imports to the EU, a VAT based, and another one where each EU member state transfers a standardised percentage of its GNI. However, as of January 2021, the Own Resources system was modified as part of the adoption of the MFF 2021-2027 and the recovery package. Consequently, the new own-resources decision raised the maximum value of resources that can be called from member states, in any given year, and increased the ceiling by 0.20 percentage points, from 1.20% to 1.40% of the sum of the EU27 Gross National Income (GNI).
The revision takes into consideration the incorporation of the European Development Fund within the EU budget, as well as a revision to address the loss of funds derived from the United Kingdom’s withdrawal from the EU. Furthermore, to cover the expenditure of the exceptional temporary borrowing of €750 billion, the own-resources ceiling was temporarily increased by a further 0.6 percentage points. Obviously, this temporary increase in the ceiling will last until the expenditure – which was part of the covid-19 recovery plan- is repaid.
Crucially important is to mention the fact that as of January 2021, the EU introduced a new own resource, whereby member states are bound to contribute an amount of money based on the quantity of non-recycled plastic packaging waste. So technically, the EU is penalising member states, lest they do not efficiently and effectively collect plastic. Undoubtedly, the plastic policy in the EU is obviously skewed. What we need here is the reduction in the production of plastic and evidently transit to glass and other sustainable practices, similar to Malta’s system pre-accession. And while you are at the supermarket, just remember that the less we recycle the more we pay to the EU for the non-recycling of plastic packaging. Plainly, this is why we need more reverse vending machines around the island.
Besides the Own Resources system, Malta, along with the rest of the member states, contributes to other off EU Budget instruments inter alia the European Peace Facility. The latter is used to assist countries in conflict, with Ukraine taking a massive share since its inception in 2021. Had it not been for Prime Minister Robert Abela, who negotiated an EU funds package way above what we contribute, by now, we would have ended up as net contributors.
Finally, I take the opportunity to augur the Prime Minister, as well as the cabinet to carry on implementing the current ambitious strategy for the benefit of Malta and its citizens.
Well done, Malta; douze points!