Malta fails to spend ‘more than half’ EGF funds

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 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 was 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 was “ineligible under EGF guidelines”, the FT revealed.

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

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

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

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

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

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

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