Following an unprecedented crisis due to the pandemic, Malta’s recovery and resilience plan responds to the urgent need of fostering a strong recovery and making Malta future ready. The reforms and investments in the plan will help Malta become more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. To this end, the plan consists of 17 investments and 30 reforms. They will be supported by € 316.4 million in grants. 53.8% of the plan will support climate objectives and 25.5% of the plan will foster the digital transition.
The transformative impact of Malta’s plan is the result of a strong combination of reforms and investments which address the specific challenges of Malta. The reforms address bottlenecks to lasting and sustainable growth through a strengthening of the rule of law and the fight against corruption, while investments are targeted to support the green and digital transition and to tackle challenges related to health and skills. All reforms and investments have to be implemented within a tight time frame, as the Regulation on the Recovery and Resilience Facility foresees they have to be completed by August 2026.
The plan will foster economic growth and create jobs. It will lift Malta’s gross domestic product by 0.7% to 1.1% by 2026. This boost to the economy will bring up to 1,200 citizens into jobs. These estimates do not include the possible positive impact of structural reforms, which can be substantial. Malta will benefit significantly from the Recovery and Resilience Plans of other Member States, for instance through exports. These spill-over effects will account for 0.4 percentage points of gross domestic product by 2026. This demonstrates the added value of joint and coordinated action at the European level.
- + 0.7-1.1% Impact of NextGenerationEU on Malta's gross domestic product by 2026
- + 1,200 Jobs by 2026
- 0.4% Gross domestic product benefits thanks to other Member States’ recovery and resilience plans in 2026
When designing the plan, Maltese authorities consulted national and regional social partners and stakeholders, while pursuing a close dialogue with the Commission ahead of the formal submission of the plan on 13 July 2021. On 16 September 2021, the Commission gave its green light to the plan. On this occasion, President von der Leyen symbolically transmitted the Commission’s assessment to Prime Minister Abela during a visit to Malta. The plan was in turn adopted by the Council on 5 October opening the door to its implementation and financing.
In the area of climate and environmental policies, Malta’s challenges include the need to reduce greenhouse gas emissions, decarbonise transport and reduce congestion, make the building stock more energy-efficient and improve waste and water management.
Key measures for the green transition
The plan supports the green transition through the large-scale electrification of road transport. An investment of €60 million will promote the purchase of zero-emission electric vehicles for the public and private sector. The purchase of 102 electric buses for public transport for €34 million and a reform granting free public transport to more than 100,000 Maltese citizens will boost the use of public transport and help address congestion. Similarly, the construction of a ferry landing site at Buġibba, St Paul’s Bay for €16 million will encourage the modal shift from road to maritime. A large-scale energy-efficiency programme for public and private buildings worth €60 million will lead to a sizable reduction of greenhouse gas emissions. In addition, Malta’s recovery and resilience plan includes important measures to improve waste management, including with regard to construction and demolition waste.
Example project: construction of a ferry landing site at Buġibba, St Paul’s Bay
The plan includes the construction of a ferry landing site at Buġibba, St Paul’s Bay, consisting of the landing facilities and a ferry terminal with a sheltered ticketing and waiting area for commuters. A bus feeder service will link the landing site to the existing bus network. Electric charging infrastructure for the ferries will pave the way for an electrification of ferry transport in Malta. The investment will encourage the modal shift from road to sea and thus help address the challenge of congestion and high emissions.
Digital challenges for Malta include differences in digitalisation between large companies and SMEs, as well as digital skills shortages and mismatches.
Key measures for the digital transition
Malta’s recovery and resilience plan supports the digital transition with investments and reforms in the public and private sectors. For example, the plan includes investments into digitalisation of the public administration and public services (€34 million) to strengthen the government’s IT systems and enhance digital public services. It also invests in the digitalisation of at least 360 companies, in particular SMEs (€15 million). Reforms include the adoption of Malta’s Digital Strategy 2021-2027, which aims to reduce the digital divide, notably by supporting families with low income to get connected and have access to computers, and to promote digital skills.
Example project: digitalisation of the Merchant Shipping Directorate within Transport Malta
The plan envisages further digitalising Malta’s Merchant Shipping Directorate by developing a number of IT tools and systems, such as the document management system, including the digitalisation of 15,000 physical shipping files, vessel management system, digital maritime interface, seafarers management system and maritime analytics tool. The merchant shipping sector is of paramount importance to Malta’s economy. The investment in digital services and a cloud-based infrastructure will help ensure more efficient regulatory practices and improve the internal operations, customer relations and administration within the directorate.
Economic and social resilience
Key macro-economic challenges with an impact on medium-term economic performance of Malta include a shortage of skilled labour, challenges related to an ageing population, and weaknesses in the regulatory and supervisory framework, which prevent businesses from taking full advantage of the opportunities offered by the green and digital transitions.
Key measures in reinforcing economic and social resilience
The plan contains a set of reforms and investment that reinforce economic and social resilience. For example, it includes crucial reforms to strengthen the judiciary’s independence, to address some features of the tax system that facilitate aggressive tax planning and to strengthen the institutional framework in order to fight against corruption and money laundering. There are measures (both reforms and investments in specialised facilities, €41.5 million) to encourage students to continue pursuing education beyond compulsory education through better vocational education and training. An investment in the Blood, Tissue and Cell Centre is expected to strengthen the resilience of the national health system by providing services for which patients previously had to travel abroad.
Example project: Establishing the Blood, Tissue and Cell Centre for Malta
The plan contains an investment project of €25 million for establishing a Blood, Tissue and Cell Centre. It includes the design and construction of the building and the procurement of medical equipment and medical furniture. The Centre will provide a number of specialised services, such as blood and tissues banking and stem cells transplants. This will alleviate the dependency of Malta on other countries for blood, tissue and cell therapies, lowering health costs and improve social well-being by offering services locally.
The plan is consistent with relevant country-specific challenges and priorities identified in the European Semester, the annual cycle of coordination and surveillance of the EU’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)