PM draws red line against move to slash Malta’s share of EU funds by €300 million

Tense talks have started in Brussels tonight between 27 European Heads of Government over the next EU Budget, which has seen many Prime Ministers - including Malta's Lawrence Gonzi - marking their red lines not to lose out on any funding over the next seven years.

Gonzi arrived in Brussels with a clear agenda: not to give in to any intransigence so far shown by the 'wealthy' net contributors to the EU's multi-trillion euro fund.

Leading the would-be budget-cutters is British Prime Minister David Cameron, whose country is, not coincidentally, one of the largest net contributors to the EU budget, second only to Germany.

"At a time when we're making difficult decisions at home over public spending, it would be quite wrong - it is quite wrong - for there to be proposals for this increased, extra spending in the EU," Cameron said on his arrival in Brussels for the meeting..
A number of other net contributors - Germany, Finland, Austria, Finland and the Netherlands, for example - share more or less the same philosophy.

Other countries - like Malta - which receive more money from the EU than it puts in, argue that the Union's budget is the best instrument to help the region emerge from the financial crisis.

A strong budget, they claim, is the best way to support investment, growth and jobs. Even countries that are net contributors to the EU benefit from its spending in the other countries, they say - not least because the poorer members will then buy more of the richer member's exports.

15 Member States have joined together to form the Friends of Cohesion Policy, taking the name from the EU's "cohesion funds," which are intended to help the union hold together by investing in poorer areas so that the gap between the haves and have-nots becomes narrower. The EU countries in the group are: Malta, Bulgaria, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Romania, Slovakia, Slovenia and Spain.

Net beneficiary

During the current EU Budget which was spread over the last seven years, Malta received a total of €855 million in EU funds, but the European Commission has seemingly departed from its original estimates, and has offered Malta €534 million for the next seven years, and later tonight reducing it again to €480 million, significantly slashing the funds by €300 million.

Unacceptable

Prime Minister Lawrence Gonzi, who is engaged in a series of talks with fellow EU leaders, including Italian Prime Minister Mario Monti, Spanish Prime Minister Mariano Rajoy and German Chancellor Angela Merkel is insisting that the cuts were "unacceptable" and would be seriously setting the island backwards, rather than forwards as stipulated in all EU Treaties.

Malta, he said, needs the funds for it to continue to advance and reach the standards enjoyed by other EU Member States.

He rebutted the arguments brought by some leaders that Malta's recent economic achievements - despite the global economic crisis - was not a "definite, forgone conclusion that one could forecast to rest upon".

"Malta needs all the assistance it could get through the EU's Cohesion Funds programme," Gonzi stressed, warning that he was not prepared to surrender what was by right entitled to Malta as a nation which still qualified for the highest of funding.

"I will not accept a sudden reversal of the success we have achieved, and I will certainly not accept to give any shocks to the island's economy," Gonzi told EU leaders and reporters.