Government, opposition dispute size of EU financial package

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Shakespeare once wrote that the devil can cite Scripture for his purpose, but a parliamentary debate on the EU budget suggests that MPs resort to statistics instead.

Prime Minister Robert Abela delivered a ministerial statement on the EU long-term budget – and Covid-19 economic recovery package – agreed upon in a gruelling 5-day Special European Council which concluded on Tuesday.

In this, he largely repeated the arguments he made at a press conference on Tuesday evening, but the ensuing question and answer round revealed wide differences in interpretation.

As may be expected, the government focused on the raw figures: Malta’s financial allocation stands at some €2.25 billion in grants, of which €1,923 million derive from the 2021-27 Multiannual Financial Framework, as the EU’s long-term budget is known. A further €327 million in grants derive from the recovery package: the government did not include the amount of loans made available to Malta.

Opposition emphasises net allocation, insists EASO budget shouldn’t count

But perhaps equally unsurprisingly, opposition MPs emphasised that Malta not only received EU funds; it also contributed to the EU budget. They also insisted that the allocation to the Malta-based European Asylum Support Office should not be included, and that when this left out, one is left with a net balance of some €600 million, roughly equivalent to the net balance of the package Malta secured for the 2014-20 MFF.

Similar arguments on the net balance of EU funds were made by PN leader Adrian Delia, Claudio Grech, Robert Arrigo and Beppe Fenech in response to Abela’s statement.

Delia also claimed partial credit for the PN by noting that Malta would not have received these funds in the first place had his party not led the country to join the EU.

But Abela emphasised that the EASO funding included in the government’s calculation only represented a third of the agency’s total budget, estimated to be the amount that will be spent in Malta.

He insisted that the net balance stood at €1.035 billion, pointing out that thus was substantially higher than the €224 million originally proposed by the European Commission in 2018.

Abela reiterates Malta will oppose new EU taxes

In his own intervention, PN MP Mario de Marco highlighted a specific part of the conclusions EU leaders agreed upon in the Council, focusing on own resources – the EU’s term for the sources of its revenue. The EU generates funding through customs duties, a portion of VAT revenues across Europe, as well as contributions based on each country’s gross national income.

But EU leaders agreed that “as a first step, a new own resource based on non-recycled plastic waste will be introduced and apply as of 1 January 2021.”

Additionally, the Commission is set to “put forward in the first semester of 2021 proposals on a carbon border adjustment mechanism and on a digital levy, with a view to their introduction at the latest by 1 January 2023. In the same spirit, the Commission will put forward a proposal on a revised ETS scheme, possibly extending it to aviation and maritime.”

“Finally, the Union will, in the course of the next MFF, work towards the introduction of other own resources, which may include a Financial Transaction Tax,” the Council conclusions read, as highlighted by de Marco.

De Marco questioned the impact of the proposed taxes on the Maltese economy, but Abela reiterated that Malta would not be accepting new taxes.

Member states still retain a veto over tax matters, suggesting that in spite of the Council’s conclusions, Malta remains willing to exercise this power to block such plans.