Who’s best to negotiate the next EU funds for Malta?

The Prime Minister we elect on 3 June will not only need to lead us out of the serious degradation of the rule of law presently taking place in this country. The next Prime Minister will also need to negotiate the European Union’s long-term budget and the allocation of EU funds for Malta from 2020 to 2027.  

The last time we did that was with former Prime Minister Gonzi. Gonzi managed to secure a package of 1.1 billion euros worth of investment in Malta covering infrastructural projects including for instance the Kappara junction and the Coast Road, social projects including several employment, apprenticeship and training schemes and educational projects including the expansion of MCAST, Esplora and several information and educational campaigns.

Over the last few years, more than 900 million euros in EU funds were in fact spent in Malta thanks to the Gonzi deal and the package before it. This money has a significant impact on our economy, not only because it stimulates growth and investment through the projects themselves, but also because it generates a good number of employment opportunities in their implementation. To give a simple example, take the Qawra Aquarium and the Esplora educational centre, these two projects employ over thirty people simply for their day-to-day running. Add a restored St Elmo and St Angelo and tens of other sites and projects and the employment figures will amount to thousands. 

If that is not enough, the projects above as many others like them, lead to an increased demand in additional services related to such projects apart for increasing the island’s attractiveness as a tourist destination. It is moreover proven in scientific studies that every euro spent on EU projects leads to roughly another seven euros spent in private investment. A recent European Commission study also demonstrates that EU funds have such a multiplier effect stimulating up to 17% of GDP growth, especially in small countries. 

When we look at the current economic scenario in Malta we should therefore not underestimate that this is indeed the result of a series of good decisions taken in the past, including the allocation of EU funds secured by Gonzi in February 2013. Over the coming year, Malta will need to secure another seven-year allocation to secure EU funds for Malta from 2020 to 2027. This will hence be one of the most important tasks in the hands of our next Prime Minister. 

Without diminishing the importance of proposals floated by the parties on domestic policies, and the overriding question of rule of law and integrity in politics, this question is possibly one of the most important criterion guiding our decision when we go to the polls on 3 June.

Now it is clear that it would be futile for Joseph Muscat and Simon Busuttil to engage in a policy debate on the long-term EU budget. The arguments in favour of a substantial allocation for Malta are out there and will be put on the EU’s negotiating table notwithstanding who is elected on 4 June.

The only thing which may differ is how these arguments are received by the other countries around the negotiating table. That reception will be dramatically influenced by the political credibility and integrity of their interlocutor - in this case the future Maltese Prime Minister.

Past events of European Union negotiations involving Greece and Cyprus bailouts should offer us a glimpse of how the European Union reacts to situations whereby a member state abuses of the EU’s flexibility. Greece’s abuse of public funds and incomplete reporting to the Eurozone was met with nonnegotiable demands for deep and painful reforms leading to thousands of people fired from public employment and a doubling of tax rates. Cyprus’s flirtation with Russian oligarchs who took over its banking industry was met with a similar unwavering strictness finally leading to the extreme measure of a penalty payment of 10% on all private savings.    

Law abiding and honest citizens in Greece and Cyprus paid for the excesses and negligence of their governments. Do we really think that the chickens will not come home to roost on the excesses of the present government?

Here in Malta we may think that the growing and ever more sustained money laundering suspicions involving our sale of passports scheme and the Panama Papers revelations are to stay within the realm of local partisan politics. This is most definitely not the case. We just saw the European Parliament in Brussels asking for answers. That request is not led by the Nationalist Party, but by political parties from several different affiliations. Last week also we saw a German regional minister calling us the Panama of Europe.

These seemingly minor developments point to the shaping up of an opinion on Malta that will most definitely set the tone for the next long-term budget negotiations in Brussels. The others around the table will already be convinced that we are taking millions of their tax-payer money in our financial services and gaming operations. 

In the past, we could defend that by taking a higher moral ground. We were using our tax rates as our legitimate competitive advantage while flaunting our serious regulatory environment, our strict enforcement and our high level of integrity ingrained in the safeguards of the rule of law. 

Our current Prime Minister, with a chief of staff embroiled in several money laundering cases, and with his own outrageous allegations to deal with, will most certainly not be able to use that higher moral ground anymore.

The cost of that deficiency will be for all of us to pay. 

Antoine Borg is a Nationalist Party candidate contesting the 7th district