From ‘good performer’ to laggard

Only four years ago an EU official had gone on record saying that Malta had managed to learn the ropes of a complicated and highly bureaucratic system very well and was performing much above its weight. He was referring to the absorption of funds under the 2000-2006 financial programme. It was a nice compliment that had gone down well. But it did not last long, for the latest bad news from Brussels is that, from being regarded as one of the best managers of EU funds, Malta has become a laggard.

Why has Malta fallen behind in such a short span of time? Edward Scicluna was right after all when, as a member of the European Parliament, he more than once drew attention to the delay by Malta in receiving the money allocated under approved projects. The Nationalist government had then insisted that the programmes were well on track and that since most of the regulatory issues and the complex procurement procedures for many projects were well underway, expenditure was expected to accelerate even further.

The issue came up again last year when Labour again criticised the government over the slow rate of absorption of EU funds. It was not a question of the government not allocating the funds well but, rather, of slow implementation of the projects taken in hand. Back in December last year, for example, the European Commission had already found that Malta’s record of final payments was slower than the EU average. The funds are only transferred when the projects are completed and the island has until the end of 2015 to receive all the funds committed under the programme.

In Scicluna’s view, civil servants were doing a good job. What appeared to be holding back progress was bureaucracy and the time it had been taking the Malta Environment and Planning Authority to issue the required permits for projects. The situation now seems to have deteriorated for, besides the time taken for Mepa to issue permits, the Commission has also raised, as problems, lack of human capacity at the evaluation stage and a complicated tendering and adjudication process.

The Commission has warned that, if Malta does not step up its expenditure, “a significant amount of the funds will be lost and the intended objectives not achieved”. Malta has only managed to obtain 30 per cent of the EU funds it has allocated to projects, which is again considered to be lower than the 41.3 per cent EU average.

Now that Scicluna is finance minister in the new government, it is expected that he will take up the matter in earnest so that obstacles standing in the way of a speedier absorption of funds are removed in time before they are lost. The Government has already declared a war on bureaucracy, a matter that ought to be taken up with vigour.

It is ironic that, while Malta is lagging behind in getting the funds allocated for the projects, a Malta Business Bureau study has found that almost a third of companies have problems accessing credit facilities. Even more disappointing is that, according to the study, the situation is more acute among start-up companies, when these ought to be helped to the hilt if Malta wants to revamp the spirit of entrepreneurship that has contributed so much to trade and industrial development.

The Government already runs schemes that are meant to help small firms, but it appears that further EU funds can be tapped to boost such help.




– : Tuesday, 30th April, 2013


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