NEWS | Wednesday, 18 March 2009

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Matthew Vella
The Nationalist Party called on Opposition leader Joseph Muscat to admit to making a mistake on the amount of EU funds that Malta has received, saying the European Commission had confirmed Malta was a net beneficiary.
On 2 March, Labour leader Joseph Muscat declared that Malta had become a net contributor to the EU budget due to the non-utilisation of EU structural and cohesion funds.
Malta’s permanent representative to the EU, Richard Cachia Caruana replied saying that Malta had made a net gain of over €200 million since EU membership.
But Labour claims Cachia Caruana is including a €46 million advance to Malta, deposited by the EU at the Central Bank, that is so far unutilised.
While Labour claims the money has not yet been transferred to the Maltese government, Cachia Caruana says the €46 million are Maltese funds nonetheless, despite not being yet utilised.
The €46 million are ‘advance payments’ on the €855 million Malta will receive up to 2013 in EU funds – for which the government must identify projects to claim the money.
But the European Commission said Monday that figures in its possession clearly showed that Malta will remain a net beneficiary, at least until the current seven-year financial period was over in 2013.
In a statement yesterday, the PN said Muscat had not only been contradicted by the Commission, but also showed his mistake in having led a campaign against EU accession and voted against membership.
“Malta has not only reaped benefits from membership but has strengthened its economy by adhering to the euro currency against the crisis that is happening in other countries… Muscat must admit his mistake rather than persist in error.”
In a counter-statement, Labour reiterated its claims that government was not attracting EU funds and that the country was a net contributor. “This is confirmed by government’s financial estimates… if the PN contradicts this, then it is contradicting EU-verified statistics issued by the government.”
Labour said it did not deny that the Commission was allocating the funds, but the government was not spending the money, and so it could not claim that the money was its own.
“Otherwise they would have been included in the financial estimates for 2009,” the PL said.
Labour MEP candidate Edward Scicluna has stated the government is accounting for EU funds it has not yet spent, and played down claims that Malta is at present a net beneficiary of European funding.
He said millions from the EU’s Structural and Cohesion fund programmes have not yet been spent from the 2007 and 2008 allocation.
“These monies will be given to the beneficiaries of the EU Structural and Cohesion funds, that is, contractors. If the government owes them millions for their services rendered in 2008, writes them the cheques which will be paid out in 2009, how is it accounting for them? Given the current outdated cash-basis system, it will claim the expense when they pay out the cheques in 2009 and not when the services were rendered in 2008.
“In this case I’m afraid the €46 million, although belonging to the government, technically will be reported as EU programme expenditure when the beneficiaries receive and subsequently cash the respective cheque. I am afraid RCC is not correct to add them in order to prove Joseph Muscat wrong.”
Scicluna says that with accrual accounting, the money is accounted for when it is actually owed, and not when the cheque is finally paid out.
“Malta hasn’t spent half the allocations for 2007 and 2008. Given that 2009 is a recessionary year, the European Commission has allowed us to use up the 2010 funds this year to accelerate works and get the economy going. But how can a government that didn’t yet spend half its monies in the past two years, be expected to spend the other half, and all of 2009’s and 2010’s allocations? We need the money to be spent now.”

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