PL labels government as 'not really European' over non-spending of job funds

Busuttil was referring to a story published on Wednesday by MaltaToday’s print edition, in which the paper revealed that the Maltese Government didn't spend more than half of the funds allocated by the European Commission for Malta under the European Globalisation Fund (EFG).

There were various occasions in the past when Malta did not benefit from all the advantages that the EU offered, “especially regarding allocation of funds from the same EU,” Busuttil said.

“If in the past, Malta was renowned for not refusing any aid (Malta qatt ma rrifjutat qamħ), this time we are returning what was given to us in aid, specifically to assist the country to grow economically and socially,” he charged.

Busuttil explained how the funds Malta had to return to the EU coffers were unutilised in “one of the most important sectors of the country, that is, to save more jobs because of the effects of economic recession”.

“The sum of €362,287 out of the €681,207 that Malta had to refund could have been used by the ETC so that more workers that lost their jobs since 2008 would have had their jobs safeguarded with the investment of these funds so that these companies which employ these people would have had some relief from economic recession,” Busuttil suggested.

“Once again, Gonzi’s government was not capable to maximise the advantages from the EU,” he said.

Instead - Busuttil said - Government was trying to justify its actions by claiming that the aims of the scheme had been reached only with the funds that had been spent. The Labour spokesman replied: “the remaining funds should have been used so that more workers are safeguarded from losing their jobs.” 

Malta, along with Portugal, had failed to spend more than half the funds under the EGF programme “because they ran out of time under EGF rules”

The startling revelation was made in Monday’s edition of prestigious financial newspaper The Financial Times, which conducted an investigation into misuse of funds earmarked to assist people who lost their jobs as a result of globalisation.

The fund was launched by the EU in 2007 and provided up to €500 million a year in support to eligible areas across the EU.

According to the PPCD website, the agency which handles EU programmes in Malta, the Maltese application for EGF support was submitted to the Commission on 12 September 2007 proposed a total budget of €1,362,414, of which only €681,207 or 50% consisted of EGF funds.

The FT investigation had showed that eight of the first 12 projects that were funded by the EGF “resulted in large repayments to the European Commission, in three instances because audits found the funds were being misused”.

In one case, the French government had been asked to repay the entire €1.3 million of EU aid designed to go to unemployed workers in the automotive sector after the Commission found that the scheme had been “ineligible under EGF guidelines”, the FT had revealed.

But France had only paid back €800,000, leaving €500,000 pending. The French finance ministry had told the FT it was “in the process of reimbursing the money”.

Four of the biggest projects submitted in 2007 and 2008 by Italy had been described as “problematic” by EU officials cited by FT.

It had also revealed how one Italian project had already resulted in a €300,000 repayment to Brussels because the way the money had been spent “contravened EGF rules”.

The Commission had since been probing the other three projects. An Italian administrator had blamed “misunderstandings” and incompatibility between EU rules and Italian labour law for some of the problems.

Another case in Germany had resulted in a small post-audit refund, the FT had revealed.

An annual report to the European Parliament and Member States, scheduled to be delivered by 1 July this year, had not been published yet, but was “expected this week”, the FT had revealed.

The Commission had told the FT it had carried out its own audit into the EGF, but had declined to give it to the London-based newspaper, claiming a lack of “overriding public interest in disclosure” of this internal document.