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James Debono
Former Maltese ambassador to Germany, William Spiteri, shed new light on the pre-accession negotiations with the EU, hinting that the million-dollar Airbus deal brokered by Air Malta was used as “bait” to entice the Germans into granting concessions on sensitive chapters of the acquis.
“Faced with a brick-wall on the German side for our request to exempt Malta from the imposition of VAT on medicines and food stuffs, we asked them ‘what about the airbus deal?” Spiteri told MaltaToday.
The former ambassador first hinted at horse-trading in pre-accession negotiations during a meeting organised by the Strickland Foundation last week.
Spiteri’s declaration is the first official admission that the Airbus deal was used as “bait” to entice the Germans to soften their opposition on Malta’s request to exempt itself from Value Added Tax on foodstuffs and medicines.
Back then Airbus S.A.S, a joint venture mainly involving German and French interests was facing stiff competition from the US-based Boeing for a multi million deal with Air Malta on the leasing of a new fleet for the national carrier.
The multi million contract was finally awarded to Airbus S.A.S. in 2002, just a few months before Malta concluded its negotiations with the European Union.
When the contract was awarded former Air Malta chairman Louis Grech adamantly excluded any “political pressure” on Air Malta to opt for the European company.
Spiteri, however did not recall any commitment by the Maltese side to lease the planes from Airbus.
“We were using Airbus as bait. We were simply sounding them,” insisted the former ambassador.
Spiteri recalled that representatives of the ministry for finance and the foreign office took part in these meetings, although he could not remember any names.
According to the former ambassador, the German response to the Maltese “bait” was simply a “smile”.
Yet Spiteri’s German counterpart Georg Merten does not recall any horse-trading on the Airbus deal in pre-accession negotiations.
“This sounds very far-fetched to me,” Merten told MaltaToday.
Yet Merten is not surprised that the German side would have smiled at any hint of horse-trading by the Maltese negotiators.
According to Merten, a dismissive smile would have been the appropriate reaction to any such request.
“This makes me remember the smile on former German Chancellor Gerard Schroeder’s face when your former Prime Minister Eddie Fenech Adami made a plea for more German investment in Malta.”
On that occasion Schroeder had gently but firmly reminded Fenech Adami that globalisation was not only something that affected Malta, but also Germany.
"The Chancellor said: 'This is our problem too, we are competitors in this case'. He pointed out that Germany has to work hard to attract investment and that the same thing has to be done here.”
Malta’s permanent representative to the European Union, Richard Cachia Caruana insists that the decision to buy Airbus aircraft was taken on its own merits and was not connected to Malta’s accession negotiations.
“There were no commitments to buy Airbus aircraft in return for concessions on any chapters of the acquis,” Cachia Caruana told MaltaToday.
But the former chief negotiator confirms that various EU member states had expressed their interest in the deal.
“Naturally, the aircraft contract was of interest to a number of EU Member States and this interest was expressed at various levels of government,” says Cachia Caruana.
Former Finance Minister John Dalli also excluded any horse-trading linking the leasing of Air Malta’s new fleet and Malta’s request for an exemption on VAT on foodstuffs and medicines.
“The decision to lease the Airbus planes was simply based on cost efficiency and Air Malta’s recommendations,” said the former finance minister.
He also insisted that Malta had based its request for an exemption of VAT on medicines and foodstuffs solely on a similar exemption granted to Ireland.
Malta was finally granted a ten-year exemption on the imposition of VAT on medicines and foodstuffs, thus allaying fears of an explosion of prices on the eve of the EU referendum.”
jdebono@mediatoday.com.mt
Links: www.businesstimes.com.mt/2002/07/10/l19.html
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