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Maltese report Maltese report
by Euro Reporter
2012-12-08 10:07:44
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Government class on EU funds absorption

Just 33.1% of EU funds available to Malta under the 2007-2013 financial frameworks have actually been paid out, MEP Edward Scicluna said Friday morning. The MEP obtained this information through a parliamentary question he posed to the European Commission. In his reply, Regional Policy Commissioner Johannes Hahn noted that Malta “shows a good performance in the implementation of cohesion policy, with 80% of available funds allocated to specific projects.” But the Commissioner did point out that there was a “slight delay in the financial absorption of funds compared to the EU average,” attributing this primarily to the slower implementation of projects. A total of €840 million had been allocated to Malta under the 2007-2013 financial frameworks, through the Cohesion Fund, the European Regional Development Fund and the European Social Fund. The ERDF accounted for more than half – €444 million to be exact – of the total allocation. But just €144 million (32.5%) were paid out by 31 October, 2012.

A total of €284 million were allocated under the Cohesion Fund, of which €103 million (36.4%) had been paid out. The ESF accounted for the remaining €112 million, of which €31 million (28%) had been paid out. All in all, therefore, €278 million in funds have been absorbed by Malta so far, amounting to 33.1% of the total. But €80 million of these are in the form of advance payments, which have to be returned if the projects are not implemented. In his reaction to the figures, Prof. Scicluna stressed that the funds allocated under the 2007-2013 framework have to be spent by 2015. This leaves €562 million – €642 million if advance payments are excluded – in funds that have to be secured in just over two years. He noted that although the government has claimed that Malta is one of the best performers as far as the utilisation of EU funds is concerned, the reality is considerably different. He added that past budgets have consistently shown that capital expenditure fell behind predictions. The MEP – who is contesting the next general election – said that whoever is elected to government next year has to absorb over €600 million after the present government only managed to secure €200 million in six years.

But, in a government reply on Friday evening, it noted that as is stated by the European Commission in its reply to MEP Scicluna’s Parliamentary Question of 8 October 2012 (Commission reply E-009027/2012, dated 6 December 2012), "Malta shows a good performance in the implementation of cohesion policy, with 80 % of available funds allocated to specific projects.” Indeed, this is among the highest absorption rates of Member States. It should be noted that the figure of 33% quoted by MEP Scicluna actually refers to the funds reimbursed by the Commission to Malta so far. Requests for payments are sent by Malta on a continuous basis and, in fact, the amount requested by Malta on the programmes to date stands at 37% with the next request expected to be sent to the Commission by year end. It is a known fact that the bulk of payments for projects are paid at the completion of the projects. This is a common and standard practice, in line with EU rules. If one were to take the status of payments of the previous (2004-2006) Programme at the same time of implementation (which would be end of 2006), the payment rate paid by the Commission stood at 30%. Malta has managed to maintain and actually improve this rate in the current period with a Programme which is 10 times larger than the previous one and which for the first time has a number of major projects which are by their very nature more complex to implement. Malta managed to absorb all the funds under the previous period and the Government is monitoring closely the current Programme to ensure that steady progress continues to be made. One should note that NO funds have been lost and none are at risk at this stage, while payments on the Programmes can be made until the end of 2015, which can be checked and claimed by Malta even after this date. Moreover, it should also be noted that the Government fully agrees with MEP Scicluna’s comments that funds need to be well managed. In this regard, Malta has an excellent track record and has a rigorous process for assessing project bids and ensuring that obligations are met. Indeed, Malta’s strong implementation and control system is held in such high esteem that the Commission has recently informed Malta that it will rely on the Government’s own control systems (article 73 of Regulation 1083/2006) for audit and control.


Malta has weathered the storm thanks to Maltese people’s thrift customs

Malta has weathered the financial crisis thanks to the collective thrift of the people of Malta, HSBC’s Head of Global Banking & Markets in Malta yesterday told a business breakfast. Speaking at the Portomaso Hilton, Mr Bond showed how in real GDP growth over the past 10 years, Malta has consistently averaged above EU levels. So too as regards government debt and deficit, which was last reported to be 2.6% and falling, while Malta’s debt figure is around 67% of GDP. On the other hand, the euro zone’s debt figure is at 80%. Malta has low unemployment – 6.4% compared to a euro zone average of 11.7%.

Asking the audience why these successes have been achieved, Mr Bond said it was the behaviour and the values of the Maltese people that saved the day. Maltese work ethic is very strong; people save before they spend, they put aside money for a rainy day, in preparation for their retirement, and so on. Furthermore, 98% of the government debt is held by locals. The people of Malta in general do not want to overreach themselves: most mortgages are of less than 50% of the value of a property. The banks are liquid and have not faced any crisis situation.

The Maltese economy has meanwhile changed its composition: where 10 years ago manufacturing and transport contributed most too gross value added, this has now shifted to ICT, health products and financial services. There is now a better balance in the economy. The banking system in Malta is based on very traditional banking models and the relationship between assets and equity is far better than what one finds in the rest of the euro zone. The latter are based on more risky models while Malta’s traditional banking model is a low-risk one. While most of the euro zone countries are starved of credit, Malta’s credit levels are rising and rising.
As regards liquidity, the traditional behaviour of most banks in Malta has ensured a plentiful supply of liquidity. In Malta, only around 80% of banking deposits are loaned out while in many countries in Europe the percentage goes up to 100% or even 120%.

As to the forecasts regarding the Maltese economy, the Commission is forecasting a 0.4% growth this year, followed by 1.6% growth next year while the forecast for the euro zone as a whole is 0.1%. As to 2014, the Commission is forecasting growth in Malta to be 2.1% while that in the euro zone will be of 1.4% and that of Greece is forecast to be 0.6%. Mr Bond outlined the challenges facing the Maltese economy. The main challenge is that the main trading partners of the Maltese economy are forecast to have two more years of stagnant growth. According to the IMF and to most rating agencies, Malta’s banking sector is high risk since it is estimated at 800% of GDP. Mr Bond disputed this and said the real figure is nearer 300% of GDP and this is mainly held by banks operating according to traditional banking models. A third challenge regards the labour market which must keep producing people with the right skills.


The story behind Malta’s Dante monument

Dante Alighieri refers to Malta once in the Divina Commedia, his epic masterpiece (written between 1308 and 1321). The Malta he records is a place of extreme pain and punishment. Scholars disagree if the poet had in mind our island, renowned as a place of exile or the Torre di Malta, near Padova, equally renowned as a particularly cruel prison. Whichever it was, given the pervasive Italianate culture prevailing in Malta up to the 19th century, Dante Alighieri and his masterpiece must have been household names to anyone barely literate on the island. The poet’s birth, reputed to have occurred in 1265, was commemorated on every centenary by lavish manifestations. In 1865, a leading sculptor, Enrico Pazzi, had been commissioned to assemble a large monument in marble to the national bard in Piazza Santa Croce, Florence. It is a fine work, within the constraints of Victorian aesthetics.

With the approach of 1965, the seventh centenary of Dante’s birth, the idea of having a commemorative memorial erected in Malta started gaining momentum. The central committee of the Società Dante Alighieri, founded in 1889 by the poet Giosue Carducci for the diffusion of Italian culture and language, resolved to endorse the project and make it its own. At first, the plan moved in the direction of having a copy made of the Pazzi statue – safe and boring – but then better judgement prevailed. Why not commission a monument by a sculptor chosen competitively from among the Maltese community of artists? The central committee of the Dante Alighieri society in Rome entrusted Raffaello Causa, the illustrious art critic and director of the Capodimonte museum in Naples, to be the final arbiter on which sculptural concept to choose for the Malta monument. Causa does not seem to have had many hesitations: he opted for the designs and model elaborated by Vincent “Ċensu” Apap, and what a felicitous choice that turned out to be. The Italian Dante Alighieri society had a tormented relationship with Malta. Its local branch was set up in the first decade of the 20th century, under Arturo Mercieca, later Chief Justice.

Its next president, from 1915 onwards, was Enrico Mizzi, later Prime Minister. It enjoyed anything but an easy existence. In 1913, the Maltese ecclesiastical authorities became aware that a high profile and militant Freemason, Senator Paolo Boselli (later Prime Minister), headed the central Italian committee as president. Bishop Pietro Pace issued a public warning about the incompatibility of being a good Catholic and belonging to the Maltese branch of the Dante Alighieri. This discredited the society no end. To add to the dismay, in December, at the instigation of the colonial authorities that viewed with concern any manifestation of Italian culture in Malta, the central committee agreed to disband the local branch. This reconstituted as a wholly autonomous Maltese entity on December 7, keeping the old name and the same objects and reasons. All pro-Italian cultural activity was officially banned in the 1930s and the Circolo Dante Alighieri only started functioning again in Malta in 1959, under its first post-war president, George Zammit. Apap went for an uncompromisingly austere representation of the poet, in which the verticality of the composition becomes the very composition, possibly inspired by the fresco portrait of Dante by Domenico di Michelino in Santa Maria del Fiore, Florence (except for the hanging arms).

Apap’s poet is in the ecstasy of contemplation, introspective, potently detached from himself, the mundane and the carnal. In his visage are the conflicts and the equilibrium of hell, purgatory and heaven, inside and outside him. He embodies all the drama, and none of the melodrama, of the Pazzi statue 100 years earlier. Apap’s closest call was his own Temptations of St Anthony, shorn of any hieratic hysteria. The statue was cast in bronze in Italy by the traditional ‘lost wax’ method to the master prepared by Apap in clay and then in plaster. Some of Apap’s preliminary sketches survive, as does his competition bozzetto, in two specimens, one in a private collection and another with Heritage Malta. These are not to be confused with the small models of the monument prepared by Apap after the statue was inaugurated, a memento offered by the artist to the committee members involved in the Dante monument project.

Strangely, these souvenir statuettes show Dante on four boulders, a fact that goes some way to challenge the intriguing symbolism attributed to the pedestal of the Floriana monument, in which the three (or four?) roughly hewn blocks of Roman travertine marble are said to represent the three books of Dante’s theological and intellectual epic: hell, purgatory and paradise. It is a lesson in not over-reading what we would like to believe into an artist’s inspirational programme. The seventh centenary of Dante’s birth fell on the year following Malta’s Independence. In power was Giorgio Borg Olivier’s Nationalist Government, the offspring of a party that had for almost a century identified with Malta’s cultural italianità and had been reviled by its political adversaries for its pro-Italian leanings. The war, in which Fascist Italy had attacked and bombed Malta for almost three years, had not been forgotten and raw anti-Italian sentiment still animated parts of the population. The public display of a monument to Dante was not bereft of delicate political hazards. It was a daring move to accept to have it displayed; it was a timid spirit of compromise that established that it should be located as inconspicuously as possible.

The final decision might have been bolder had the Government been aware that Dom Mintoff, the powerful leader of the Labour Party, had been formally and secretly negotiating Malta’s integration with Italy, at exactly the same time Borg Olivier was negotiating Malta’s independence from the UK. The official exchanges documenting Mintoff’s highly secretive plans to integrate Malta with Italy only surfaced considerably later. In 1965, the Government still believed that placing the Dante monument in a prominent place could be perceived as provocative and insensitive by a number of Maltese and would have afforded political mileage to the Opposition. At first, a site next to the NATO headquarters in Floriana had been identified but this was later discarded and a suitable, but even more inconspicuous place was found for it by the Director of Museums, Fr Marius Zerafa OP, on the flank of St Anne’s curtain close to St Mark bastion, opposite the main Mepa offices in Floriana. The monument and the ramparts complement each other splendidly, the starkness of the stone curtain echoing the poet’s cosmos of meditation. Quite uncharacteristically, the budget for the project had been underspent and some use had to be found for the surplus financing. A wrought iron fence decorated with eight-pointed crosses and the Florentine lily enclosed the monument. For the inauguration ceremony, the Italian Minister for Education, Luigi Gui, came over. Gui had left his mark in Christian Democratic politics but had also acquired a solid reputation as a philosophical animator. Relying on him to celebrate the supreme Christian thinker was perhaps more of a deliberate choice than a coincidence.

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