Minister Schembri opposes diverting EU cohesion policy funds to defence 

Malta’s Economy Minister Silvio Schembri came out strongly against the diversion of EU cohesion funding towards defence projects.

Addressing an informal meeting of EU Ministers for Competitiveness in Nicosia, Cyprus, Mr Schembri stressed that Malta’s SME-driven economy contributes primarily through dual-use sectors rather than military production.

He said that Malta firmly opposes diverting Cohesion Policy funds towards defence. 

Instead, he called for a dedicated European Competitiveness Fund with ring-fenced support for SMEs, arguing that such a framework could also provide valuable support for Important Projects of Common European Interest (IPCEI), including semiconductors and the upcoming European Chips Act 2.

The Cohesion Fund aims to strengthen the EU’s economic, social and territorial cohesion by providing funding to member states with a gross national income per capita below 90 per cent of the EU’s average.

Malta currently benefits from this fund, along with Bulgaria, Czechia, Estonia, Greece, Croatia, Cyprus, Latvia, Lithuania, Hungary, Poland, Portugal, Romania, Slovakia and Slovenia.

However, last year the European Parliament voted in favour of allowing member states and regions to channel cohesion funding into defence projects.

At the Nicosia meeting, Mr Schembri also noted that enhancing digital, STEM, and financial literacy is essential for SMEs to remain competitive. 

With regards to the Single Market, he emphasized that as an island nation, freedom of movement and mobility services are paramount for Malta. He called for the removal of digital barriers in AI and data sharing, stressing that future-proof legislation must include human oversight and robust protection for minors. 

Cover photo: Silvio Schembri/Facebook