Record Level of Funding
Following the closure of the negotiations at the EU Council of last weekend, Malta is set to receive €2.25 billion in EU funding over the 2021-2027 budgetary period. This is very good news for Malta given that over the previous budgetary period covering 2014-2020 the country registered one of the best economic performances and thus it was deemed to less in need for aid. Despite the fact, that the UK is no longer a contributing member, the EU’s budget increased from €960bn to €1074bn next year.
Malta’s allocation from the EU’s core budget – its multiannual financial framework (MFF) amounts to €1.9 billion with the remaining €327m granted as part of a coronavirus stimulus package.
The following graph refers to how the EU funding for this period compares with the previous funding round.
The Covid-19 recovery instrument and recovery and resilience of the single market are two new sources of funding for EU countries. The three pre-existing instruments, all showed marked increases in Malta’s allocation as shown below.
Thus, funding under the migration, borders, security, education, and fisheries increased by 130%, research, innovation & environment by 72%, funds for agriculture by 38% and the Cohesion funds by 20%. The post-coronavirus stimulus package also affected some of the above increases. The EU also allocated €386m to the European Asylum Support Office which is Malta-based.
Malta’s Contribution to EU Budget
For the 2014-2020 period, Malta had to pay 501 million euro in contributions whereas this has more than doubled for the 2021-2027 period. Malta is projected to remain one of the EU’s best performers when it comes to surviving the economic fall-out of the pandemic. That strong economic performance will be reflected in Malta’s growing contribution to the EU’s budget, which is automatically calculated based on gross national income.
EU member states will also contribute to repaying loans the European Commission will take out to finance parts of its coronavirus stimulus package. The loans will be financed between 2028 and 2056 by member states and Malta will be forking out €15 million a year, on average, to cover these costs.
For the upcoming budgetary period Malta will remain a net beneficiary to the EU with a net balance of around of €1 billion received by the country over the next 7 years.