Malta to receive €40.5 million in EU Brexit adjustment funds

MEPs on Thursday struck a political agreement on the €5.4 billion Brexit Adjustment Reserve, which means the first payments to member states will be able to be made by December.

According to the most recent data on how the multi-billion-euro fund is to be distributed amongst member states, Malta’s share will amount to €40,510,728.

The Brexit Adjustment Reserve (BAR) focuses on countries and sectors worst affected by the UK’s departure from the EU by loss of trade and applies a distinct focus on the fisheries sector.

While there is no foreseeable impact on Malta’s fishing sector, Malta’s export and import activity with the UK, expressed as a percentage of GDP, is one of the EU’s highest at 37.4. Only Luxembourg, at 48.4%, is higher.

According to the provisional agreement struck by MEPs, three factors have been used to calculate how much money each EU country will receive from the BAR: the importance of trade with the UK, the importance of fisheries in the UK exclusive economic zone and the population living in maritime regions bordering the UK.

As such, Ireland will be, by far, the largest beneficiary in absolute terms, followed by the Netherlands, France, Germany and Belgium.

Malta’s €40.5 million in measures to help mitigate the effect of Brexit on the economy can, according to Thursday’s agreement, include:

• Support for businesses (especially SMEs), the self-employed and local communities;
• Investments in job creation and reintegration in the labour market, including short-term work programmes, retraining and training courses;
• Support to help citizens returning from the UK as a consequence of Brexit to reintegrate;
• Support to the functioning of the border, customs, health, phytosanitary and security controls, fisheries controls, certification and licensing schemes.

Following the political agreement sealed by MEPs this week, the European Parliament will vote on it as a whole in its September Plenary session.

The European Parliament has also agreed with the Council on an extension of the eligibility period to cover expenditure incurred between 1 January 2020 and 31 December 2023 for measures specifically taken to mitigate the expected negative effects of Brexit. The Commission’s proposal had previously limited this period to between 1 July 2020 and 31 December 2022.

The first instalment of €1.6 billion in pre-financing will be available by December 2021. Two other pre-financing tranches of €1.6 billion will be paid at the beginning of 2022 and 2023. The remaining €1 billion will be paid out in 2025.

“The European Parliament has kept its promise,” said lead negotiator MEP Pascal Arimont (EPP, BE).

“We wanted a quick European response and swift assistance to regions and businesses suffering from the negative effects of Brexit. That is what we have managed to do with today’s agreement.

“We set out clear criteria for the allocation of the reserve so that funding goes where it is actually needed. And we made sure the assistance can already be allocated from the end of this year.”

Regional Development Committee Chair, Younous Omarjee (The Left, FR), added, “We needed to urgently respond to the multifaceted Brexit crisis, which we have done within an extremely short timeframe with the Brexit Adjustment Reserve.

“The BAR will be flexible and will help citizens, businesses and the sectors most affected. The requirements of the green pact are taken into account in the text, a minimum envelope dedicated to the fishing sector has been agreed, the regions and local authorities can be better involved, and we excluded financial services from receiving support from the fund.”