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Update 2 | Malta to keep €200 million top-up from EU, but risking energy funds

Malta set to keep €200 million top-up offered in November, as Prime Minister Lawrence Gonzi battles in Brussels to increase €680 million package, but risks losing substantial funds for gas pipeline.

Karl Stagno-Navarra
8 February 2013, 12:00am
Prime Minister Lawrence Gonzi (L) talks with British Prime Minister David Cameron during the Summit in Brussels


Updated at 10:25am

Prime Minister Lawrence Gonzi may have to stick to a €680 million financial package, which includes the €200 million top-up offered last November by European Council president Herman Van Rompuy, but appears resolute to to ensure enough funds from Europe to finance the island's energy ambitions.

According to the headline figures in the latest EU budget proposal, the overall total level of the budget has been capped at €960 billion, down from the €972 billion or 1.01% of EU's Gross National Income (GNI), under the November proposal of Van Rompuy.

Competitiveness for growth and jobs appears to be one of the biggest victims of the changes. The total level of commitments is now put at €125.7 billion, down from €152.5 billion in the previous proposal.

In particular, the 'Connecting Europe Facility' (CFE) - where Malta is pushing for substantial funds to secure financing for its planned gas pipeline - has been slashed from €41.2 billion to €29.3 billion. The budget for energy has been slashed from €7.12 billion to €5.12 billion.

The overall transport sector budget has also been slashed from €26.9 billion to €23.1 billion.

On Cohesion funds, the level of commitments is to recieve a marginal increase, from €320.1 million in the old proposal, to €324 million. Resources for the "Investment for growth and Jobs" remain substantially unchanged at €312.7 million.

In this figure, the sub-division is as follows:
  • A total of €163 billion for less developed regions, up from €161.4 billion;
  • €31.5 billion for transition regions, up from €31.3 billion;
  • €50.3 billion for more developed regions, marginally dropped from €50.8 billion;
  • €66.3 billion for member countries supported by the Cohesion Fund, up from virtually unchanged from €66 billion.
  • €1,387 billion for the outermost regions remains intact.


New paragraphs have appeared, favouring various regions in some member countries. Malta and Cyprus are to continue to receive €200 million and €150 million respectively.

Additional new provisions are inserted to reflect "recent developments in their economy". ​Belgium receives €100 million divided equally between Limburg and Lieg.

The European Union and its institutions are set to reduce staff by 5% over the next five years until 2017, while significant pension scheme changes for the administration are to be introduced, including a so called 'solidarity levy' at a level of 6%.

A cautious Prime Minister Lawrence Gonzi was to stand his ground, insisting that Malta must not lose out on European funds, which are desperately needed to finance a multitude of important projects, mostly due to its geographical reality, as an island state, in need to develop its energy sector.

The EU's chief budget negotiator, Van Rompuy, proposed further modest cuts to the bloc's long-term spending plan earlier on Thursday in a bid to try to bridge deep divisions among member states on how the funds should be spent.

Van Rompuy, who chairs EU summits, delayed the start of negotiations by more than five hours yesterday and initially withheld his budget plan because he felt governments remained too far apart to strike a deal.

The budget, which covers spending for 2014-2020, tackles everything from agricultural subsidies to scientific research, roads and infrastructure, foreign aid and development assistance and is fought over bitterly, often along national lines.

According to Gonzi, who addressed the Maltese media shortly before entering the negotiations late yesterday evening, "one must realistically prepare for the worst," as Malta is still not happy with the €680 million, which includes the €200 million offered last November.

The budget allocated to Malta would be the funds the newly elected government next month would have to work with, and within a scenario where Malta would also host the EU Presidency in 2017.

Malta will need the funds to finance the gas pipeline, and other energy related projects as it would be strengthening itself to attract more investment, create jobs, and further develop all sectors, including health and education.

Last November's offer before the collapse of the talks in Brussels, stood at €680 million, which was far more better than the initial pittance of €400 million. "But even €680 million is not enough, and we will stand our ground," Gonzi said.

Gonzi is accompanied in Brussels by Richard Cachia Caruana, his former permanent representative at the EU who was forced to resign following a parliamentary vote in June last year.

Cachia Caruana is said to be accompanying the Prime Minister in his capacity as an 'advisor' during the summit. His successor, Marlene Bonnici is also present, and engaged in a series of meetings with other delegations as the negotiations continue.
Anthony Galea
I also agree with Joseph Howard that the opposition should have been invited to join, when it is most probable that Pl will be governing Malta. At least PL would not be able to critisize Gonzi for not succeeding in obtaining sufficient funds. But as always Gonzi does not care for the needs of Malta but only for himself
Anthony Galea
I also agree with Joseph Howard that the opposition should have been invited to join, when it is most probable that Pl will be governing Malta. At least PL would not be able to critisize Gonzi for not succeeding in obtaining sufficient funds. But as always Gonzi does not care for the needs of Malta but only for himself
Aristide Galea
Jekk skont dak li gie irrapurtat nistgħu nitilfu il-fondi tal-enerġija biex ikun jista jsir il-pipeline tal-gas , jista l-Onorevoli Prim Ministru jgħid jekk f'dak il-kas ikunx jagħmel aktar sens dak li qed jgħid il-PL , cioe li jkun aktar vijabbli trasport tal-gas bil-vapuri ? Barra minn dan , b'dan il-metodu ma nkunu dipendenti fuq hadd , għax inkunu nistgħu nixtru min fejn jaqblilna .
bidlafilgvern
The Prime Minister at these summits is almost always pictured in Maltese media talking to David Cameron. Is Cameron the only PM that Gonzi is on speaking terms with? Gonzi wants to sell his party as "pro-EU". How does he explain his apparently close friendship with Cameron?
Ethelbert Scehmebri
The PN had already a foggy energy plan, now with this cut the PN will have no plan at all and Malta will have to keep on using that nice HFO that according to the PN is so clean and healthy for us all. And how could Gonzi that he himself lost a vost of confidence in parliament take with him a RCC that was thrown out from his position by yet another vote in parliament.. It is already a disgrace seeing a Gonzi acting as nothing ever happened, but to keep taking RCC is an insult to the Parliament
Alastair Galea
I do agree with Joseph Howard.
briffy@maltanet
J Howard....Dr Gonzi is still the PM and will remain so till election day. He is still responsible for anything that happens here. According to yr reasoning responsibility for anything untoward would have to be shared by the opposition as well as the government
Joseph Howard
Although technically as a Care taker Government Dr Gonzi may still exercise certain powers as a Prime minister, at this point in time I feel that he is over exercising his position and has no right to deal with such matters on the eve of a general Election. Also I feel that the presence of Mr Richard Cachia Caruana who has been removed from his Ambassadorial role in a motion in Parliament on the grounds of betrayal should not attend any meeting as a Government representative. Dr Gonzi may argue that Mr Cachia Caruana is there as his consultant, one has to remind him that he ( Mr Gonzi) is there not in his personal capacity but that of Prime minister that has been, voted out of Parliament when he lost a vote of confidence which brought his administration to an end. I feel that one should have reached an agreement with the opposition so that at least a team having the trust of both major parties should have been chosen for such a task.
Claude Caruana
Who is that on the right? Surely not RCC? I thought he had resigned? Well, wonders never cease....