Malta’s yearly financial burden as a result of the Brexit shortfall

Article written by Duncan Barry – Communications and Events Executive
Published on The Malta Independent – 25.02.19

When Brexit first came about, Prime Minister Joseph Muscat had set up a special unit on Brexit to evaluate the general impact on Malta. Now it’s also serving as a platform for citizens and business people who have questions or uncertainties on jobs, travel, rights, trade, health or any other issues that will come about after Brexit. As soon as talk of a no-deal Brexit started, the government hit the ground running in preparing for this eventuality as well.

During a news conference on January 25, Dr Muscat said that the Government has a contingency plan and is currently preparing for the financial impact on Malta in the case of a no-deal Brexit.

HM Treasury estimate that in 2017 the UK made a gross contribution of £13 billion to the EU budget.  A factsheet uploaded on the government portal, states as follows: ‘Should a gap in funding in the 2014-2020 Multiannual Financial Framework be created by the UK’s withdrawal, and needs to be made up for by other Member States, the Maltese Government’s estimate is that this would amount to some €14 billion (without taking account the UK Correction, which is a form of refund to the UK). The Government would therefore have to pay an additional €12 million annually, with a net cost of €6 million annually to the UK Correction’.

It’s no secret that Member States, including small states like Malta, will have to foot heftier bills when the UK does opt out to make up for the financial gap a contributor the size of Britain will leave behind.

The financial implications of the UK’s departure on the EU is either to increase contributions of existing Member States or cut spending, the latter probably being less likely.

A financial settlement has been negotiated between the EU and the UK which should cover the UK’s financial obligations under the current Multi-Annual Financial Framework (MFF). If and when the UK agrees to this, along with the subsequent withdrawal agreement, all EU projects and programmes will be financed as planned under the current MFF. This, in turn, should serve as a reassurance for potential beneficiaries.

With barely a month to go before the UK leaves the EU and a no-deal scenario in sight, since the EU stands firm that it will not bow down to pressure by the UK to renegotiate some terms, including the Northern Irish border backstop, the government has taken the bull by its horns and has set up a helpline both in the Malta and the UK. The helpline in Malta directs you to the Brexit Unit while the one in the UK directs you to the Maltese High Commission.

MEUSAC is also setting the stage in this eventuality and is turning to its social online media channels to help citizens and businesses understand what the outcome will be in the many sectors that exist in the event of a no-deal, serving as a platform which gives peace of mind and reassurance to those who will potentially be affected.

Have you got any questions on Brexit? Call MEUSAC on 2200 3300 or Brexit helpline 153. A factsheet can also be found on which states the Malta Government’s plans in case of a no-deal Brexit.

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