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Malta’s Recovery and Resilience Plan: a gamechanger for the country’s economic transformation

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The European Commission has recently greenlighted Malta’s recovery and resilience plan, a crucial step in accessing more than €316m in funding made available under the Recovery and Resilience Facility. This financing will support the implementation of the crucial investment and reform measures outlined in Malta’s recovery and resilience plan. It will play a crucial role as Malta seeks to emerge stronger from the COVID-19 pandemic.

The full recovery fund will be spent on six areas agreed on with the European Commission earlier this Summer, covering the circular economy, decarbonisation, digital investments, educational initiatives, social policy spending, and investing in upgrading Malta’s institutions. It has been reported that the funding program will finance some 17 major investment projects earmarked for the coming months. 

The RRF is at the heart of NextGenerationEU which will provide €800 billion to support investments and reforms across the EU. The Maltese plan forms part of an unprecedented coordinated EU response to the COVID-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market. By offering large-scale financial support for investment and reforms, the Facility will better prepare Member States for a sustainable recovery.

In this assessment, we look at the key elements of Malta’s plan.

Securing Malta’s green and digital transition  

As Commission President Ursula Von der Leyen remarked during her brief stop in Malta last week, the plan is heavily green-based, putting Malta on top of the EU pile in this context. More than half of the plan is devoted to support climate objectives. This includes investments to finance sustainable transport initiatives, including a ferry landing site and electric vehicles, as well as energy efficiency interventions in buildings.

The plan also includes reforms that aim to improve transport planning, broaden the free access to public transport, and implement the Sustainable Urban Mobility Plan of the Valletta region. Reforms of waste management systems aim to strengthen the circular economy in Malta.

The Commission finds that Malta’s plan devotes 26% of its total allocation to measures that support the digital transition. This includes efforts to further digitalise the public administration and public services, including the healthcare and judicial systems, as well as to strengthen initiatives related to digitalisation for the private sector.

Reinforcing Malta’s economic and social resilience

Malta’s plan includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing all or a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Malta.

The plan includes measures in the areas of healthcare, social protection, education and skills, innovation, energy efficiency, waste, sustainable transport, judicial independence, anti-corruption and anti-money laundering. The relevance of such investment has risen considerably in the past weeks as Malta seeks a quick exit from a concerning grey-listing adopted by the Financial Action Task Force.

epa08027627 The Malta Law Courts, in Valletta Malta.
The approved RRF plan includes investments targeted as strengthening judicial independence. EPA-EFE/DOMENIC AQUILINA

It also includes measures that partly address challenges in the areas of aggressive tax planning, innovation and pension adequacy and sustainability.

The plan represents a comprehensive and adequately balanced response to Malta’s economic and social situation, thereby contributing appropriately to all six pillars of the RRF Regulation.

Supporting flagship investment and reform projects

Malta’s plan proposes projects in five European flagship areas. These are specific investment projects, which address issues that are common to all Member States in areas that create jobs and growth and are needed for the green and digital transition. For instance, Malta has proposed to provide €60 million to renovate private and public buildings, including hospitals and schools, to improve their energy performance. This will result in Malta reducing its primary energy demand, limiting energy waste, lowering carbon emissions, while also ensuring positive social, health and environmental implications.

President Ursula von der Leyen said that she was particularly pleased that the plan places such a strong emphasis on measures that will help secure Malta’s green transition. The investments in promoting energy efficiency and sustainable mobility outlined in Malta’s plan are as urgent as they are crucial. We will be with you every step of the way as the focus turns to implementing this ambitious plan.”

The Commission has adopted a proposal for a Council Implementing Decision to provide €316.4 million in grants to Malta under the RRF. The Council will now have, as a rule, four weeks to adopt the Commission’s proposal. The Council’s approval of the plan would allow for the disbursement of €41.1 million to Malta in pre-financing. This represents 13% of the total allocated amount for Malta. The Commission will authorise further disbursements based on the satisfactory fulfilment of the milestones and targets outlined in the Council Implementing Decision, reflecting progress on the implementation of the investments and reforms. 

Documents

Contact CDEIU EU Affairs Unit for more details and specific information. 

Photo Dati Bendo – European Union, 2021 – EC – Audiovisual Service

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