NEWS | Wednesday, 27 February 2008

George Vella cites ‘exceptional circumstances’ clause in defence of Malta Shipyards

European Commission not aware of ‘exceptional circumstances’

David Darmanin

Amid a wave of criticism walloping the MLP for ‘wanting to re-open Malta’s EU deal package’, in a political debate Friday, former Labour deputy leader George Vella pointed out a proviso featured in Malta’s EU accession treaty that can make “talks for the extension of Malta Shipyard’s subsidy deadlines possible.”
The accession treaty Malta signed with the EU imposes a deadline on subsidies forwarded to Malta Shipyards by the end of 2008. “The same treaty,” George Vella said, “specifies that ‘If viability for the shipyards cannot be achieved owing to exceptional circumstances unforeseen at the time the restructuring plan was drawn up, the Commission may review the conditions set out.’”
“PN’s spin is wrong and goes against national interest,” Vella told Business Today yesterday.
However, a spokesperson for the European Commission told this newspaper that ‘exceptional circumstances’ must be “understood in a very strict way” and, as of today, the Commission “is not aware of exceptional circumstances which have hindered restructuring.”

“What we are saying has nothing to do with trying to re-open Malta’s EU package. We are proposing that an expert is appointed to draw up a report that looks into the viability of Malta Shipyards, as performance over the last years indicates that the shipyards may come to a point of self-sufficiency in a few years. Government has already announced this. Of course, a professional report confirming sustainability would be needed. The next step would then involve presenting this report to the EU Commission, asking for an extension.”
Asked whether this was as easy as it sounded, Vella said: “No it’s not easy, but it’s worth giving it a try. Such an issue would be partly legal and partly political, just like any other similar claim presented to the Commission. You need to achieve consensus for this to go through, so one would need to convince other countries.”
Vella said that he knew of “an internal report prepared by the financial department of the drydocks, in which a two-year extension of the deadline is discussed.”
“Besides, the treaty specifies that Lm16 million were to be invested in making the Shipyards more productive and profitable. This amount was never invested. One may use this as an argument to prove the ‘unforeseen circumstances’ mentioned in the accession treaty,” Vella told Business Today.
Defending himself from the way he was criticised by the PN, Vella exclaimed: “All I’m saying is – give us a chance and we’ll see. Do you throw away 1,900 jobs just like that? What would PN do if re-elected? Will they not talk about an extension? Or will they transfer employees to the civil service on government payroll and subsidise them anyway?
“And why is the PN spinning on this idea anyway? Aren’t they doing the same thing we are proposing on the issues of hunting and medicine? What they’re doing is neither healthy, nor intelligent. This is not about pointing the pistol at someone’s head, it is simply about discussing.”
Asked whether he is confident about gaining sympathy from other countries represented in the commission over the issue, he said that one may argue that it is unlikely for such an extension to impinge on the EU’s single market, and would therefore be looked upon more favourably by the commission. “Compared to the EU’s single economy, Malta Shipyards had very little significance in financial terms,” he said, “the de minimis factor must be taken into account.”
Vella insisted that there must have been a reason why a fall-back proviso was included in the accession treaty.
“I don’t know who proposed it, but whoever did, is to be commended. If it was the Maltese government to include it, then isn’t the same government interested in using it? And if it was the commission to include it as a standard clause, this goes to show that the EU is open to hear us out on exceptional scenarios, thus increasing the possibility of saving the Shipyards,” Vella insisted.
Asked by Business Today, a spokesperson for the EU commission in Brussels stated: “The text of the Accession Treaty authorises the Commission to change certain conditions - and in particular the prohibition of aid after 31 December 2008 -, but only in exceptional circumstances and after consultations of the other Member States. It is therefore unlikely that a change could be approved since the terms “exceptional circumstances” must be understood in a very strict way. In addition, as of today, the Commission is not aware of exceptional circumstances which have hindered the restructuring.”