COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Malta Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Malta
Date: 2021-09-16
Institutions: European Commission, Secretariat-General
Subjects: Malta, coronavirus disease, digital economy, economic and social cohesion, economic recovery, economic reform, epidemic, green economy, investment, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 16.9.2021  SWD(2021) 269 final  COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Malta Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Malta {COM(2021) 584 final}  
 
 
Table of contents 
1.  Executive summary ................................................................................................................... 4 

2.  Recovery and resilience challenges: scene-setter ..................................................................... 7 

2.1.  Macroeconomic outlook and developments since the 2020 country report ..................... 7 

2.2.  Challenges related to sustainable growth, cohesion, resilience and policies for the next 
generation .................................................................................................................................. 10 

Smart, sustainable and inclusive growth ................................................................................. 10 

Social and territorial cohesion ................................................................................................ 10 

Health and economic, social and institutional resilience ........................................................ 11 

2.3.  Challenges related to the green and digital transition ..................................................... 12 

Green dimension ..................................................................................................................... 13 

Digital dimension .................................................................................................................... 16 

3.  Objectives, structure and governance of the plan ................................................................... 20 

3.1.  Overall strategy of the plan ............................................................................................ 20 

3.2. 

Implementation aspects of the plan ................................................................................ 24 

Consistency with other programmes ....................................................................................... 24 

Consistency with the challenges and priorities identified in the most recent euro area 
recommendation ...................................................................................................................... 25 

Administrative organisation .................................................................................................... 26 

Security self-assessment ......................................................................................................... 28 

Cross-border and multi-country projects ................................................................................ 29 

Communication strategy ......................................................................................................... 29 

State aid ................................................................................................................................... 30 

4.  Summary of the assessment of the plan .................................................................................. 30 

4.1.  Comprehensive and adequately balanced response to the economic and social situation

30 

Green transition ....................................................................................................................... 31 

Digital transformation ............................................................................................................. 32 

Smart, sustainable and inclusive growth, including economic cohesion, jobs, productivity, 
competitiveness, research, development and innovation, and a well-functioning single 
market with strong SMEs ........................................................................................................ 32 

Social and territorial cohesion ................................................................................................ 32 

Health, and economic, social and institutional resilience, with the aim of, among other 
things, increasing crisis preparedness and crisis reaction capacity ......................................... 33 

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Policies for the next generation, children and youth, such as education and skills ................ 34 

4.2.  Link with country-specific recommendations and the European Semester ................... 35 

Public finances: long-term sustainability and fiscal policy .................................................... 35 

Healthcare system: Resilience and provision of health .......................................................... 35 

Labour market and social policies .......................................................................................... 36 

Education and skills: Training outcomes, quality, access, inclusiveness ............................... 36 

Digital transition ..................................................................................................................... 37 

Green transition, in particular clean and efficient production and use of energy ................... 37 

Justice system, prosecution service, corruption ...................................................................... 38 

Money laundering ................................................................................................................... 39 

Aggressive tax planning .......................................................................................................... 40 

Response to the current economic and social situation and impact on growth potential ....... 40 

4.3.  Growth potential, job creation, economic, institutional and social resilience, European 
Pillar of Social Rights, mitigating the impact of the crisis, and social and territorial cohesion 
and convergence ........................................................................................................................ 42 

Fostering economic growth and jobs ...................................................................................... 42 

Strengthening social cohesion ................................................................................................. 46 

Reducing vulnerability and increasing resilience ................................................................... 46 

Cohesion and convergence ..................................................................................................... 47 

4.4.  The principle of ‘do no significant harm’ (DNSH) ........................................................ 49 

4.5.  Green transition .............................................................................................................. 51 

Climate target .......................................................................................................................... 51 

Green transition ....................................................................................................................... 53 

4.6.  Digital transition ............................................................................................................. 54 

Digital tagging ........................................................................................................................ 54 

Digital transition ..................................................................................................................... 56 

4.7.  Lasting impact of the plan .............................................................................................. 59 

Structural change in administration and institutions ............................................................... 59 

Structural change in policies ................................................................................................... 60 

Lasting impact ......................................................................................................................... 61 

4.8.  Milestones, targets, monitoring and implementation ..................................................... 61 

Adequacy of the structure tasked with implementation of the plan, monitoring of progress 
and reporting ........................................................................................................................... 61 

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Milestones, targets and indicators ........................................................................................... 62 

Overall organisational arrangements ...................................................................................... 62 

4.9.  Costing ............................................................................................................................ 63 

Reasonable costs ..................................................................................................................... 63 

Plausible costs ......................................................................................................................... 63 

No double EU financing ......................................................................................................... 64 

Commensurate and cost-efficient costs .................................................................................. 64 

4.10.  Controls and audit ........................................................................................................... 64 

Robustness of internal control system and distribution of roles and responsibilities ............. 64 

Adequacy of control systems and other relevant arrangements .............................................. 65 

Adequacy of arrangements to avoid double EU funding ........................................................ 66 

4.11.  Coherence ....................................................................................................................... 67 

Mutually reinforcing measures ............................................................................................... 67 

Complementarity of measures ................................................................................................ 68 

Annex ............................................................................................................................................. 70 

3 

 
 
 
 
 
1.  EXECUTIVE SUMMARY 

The Maltese economy was badly hit by the COVID-19 pandemic and went from an above-
average EU growth rate of 5.5% in 2019 to a contraction of 7.8% in 2020. The tourism sector 
was  affected  in  particular,  while  the  general  contraction  was  partially  offset  by  a  steady 
expansion  in  the  iGaming  and  financial  services  industries.  The  government  took  significant 
measures to support the economy, which limited the effects of the crisis. Employment continued 
to increase in 2020, while unemployment increased only slightly (from 3.6% in 2019 to 4.3% in 
2020). The budget, which has been in surplus since 2016, recorded a deficit of 10.1% in 2020. 
Public debt is still at a moderate level despite increasing from 42.0% of GDP in 2019 to 54.3% in 
2020.  

Malta’s recovery and resilience plan (RRP) has a total value of EUR 344.9 million, which is 
above  the  non-repayable  financial  support  of  EUR  316.4  million  (approximately  2.3%  of  2019 
GDP) available to Malta under the RRF Regulation. Malta is not asking for loans. 

Despite  strong  growth  before  the  pandemic,  Malta  still  faces  significant  challenges.  While 
steps  have  been  taken  to  increase  participation  and  attainment  rates  in  education  and  training, 
there is still a high share of pupils with insufficient levels of basic skills  and a high number of 
early  school  leavers.  Labour  and  skills  shortages  remain  an  issue  and  have  increased  in  recent 
years, while the current crisis is expected to exacerbate them in some sectors and redefine them in 
others.  Women’s  participation  in  the  labour  market  remains  low.  Despite  some  improvements, 
the gender employment gap is still one of the highest in the EU. The health system delivers good 
outcomes,  but  its  resilience  and  sustainability  can  be  further  improved.  Additional  efforts  are 
needed  to  strengthen  the  independence  and  effectiveness  of  the  justice  system,  to  improve  the 
Maltese  anti-corruption  and  anti-money  laundering  framework  and  to  curb  aggressive  tax 
planning  practices.  Research  and  innovation  (R&I)  continues  to  play  a  limited  role  in  Malta’s 
economy,  and 
transition.  Achieving 
environmentally  sustainable  economic  growth  remains  one  of  Malta’s  key  challenges.  Further 
efforts are needed in particular on energy efficiency, renewable energy, sustainable transport and 
waste management.  

investments  are  needed 

to  accelerate 

the  digital 

Investments and reforms in the recovery and resilience plan are expected to help address a 
significant subset of the country-specific recommendations identified in recent years as part 
of  the  European  Semester.  The  plan  is  ambitious  and  envisages  reforms  and  investments  to 
address the challenges identified in health, employment, education and skills, climate and digital 
transition, justice and the fight against corruption and money laundering. Good governance is one 
of  the  pillars  of  the  government’s  long-term  economic  vision,  and  the  plan  makes  significant 
efforts to remedy the challenges in this area. Investing in education also features prominently in 
the  plan,  with  relevant  measures  proposed  to  address  weaknesses  in  the  education  system.  A 
major part of planned investments focuses on the green and digital transition, thereby addressing 
the country-specific recommendations on investments in these areas. The challenges identified in 
aggressive tax planning, R&I  and the  sustainability of the pension system  are partly addressed. 
The investments and reforms included in the recovery and resilience plan also appear consistent 

4 

 
 
with the challenges and priorities identified in the Council Recommendation on economic policy 
of the euro area. 

The plan is balanced in its response to the six policy pillars referred to in Article 3 of the 
RRF  Regulation1.  The  first  three  of  the  six  components  are  directly  related  to  the  green  and 
digital  transition.  The  remaining  four  policy  pillars  are  addressed  in  the  other  components 
through  measures  to:  (i)  strengthen  and  increase  the  resilience  of  the  healthcare  system;  (ii) 
strengthen  early  school  leaving  prevention  measures  and  improve  the  education  and  vocational 
education  system;  (iii)  implement  measures  to  support  innovation;  (iv)  digitalise  to  increase 
public  administration  efficiency,  including  the  health  and  justice  systems;  and  (v)  address 
institutional bottlenecks through governance reforms. 

The  investments  and  reforms  included  in  the  plan  are  expected  to  strengthen  growth 
potential,  job  creation,  resilience  and  cohesion.  The  strengthening  of  the  institutional 
framework, education system reforms and digitalisation efforts in particular are expected to boost 
growth  potential.  Further  benefits  for  growth  and  jobs  are  expected  from  the  investments  and 
reforms  to  boost  energy  efficiency,  decarbonise  transport,  improve  the  health  system  and 
strengthen R&I. Institutional resilience is addressed by reforms and investments to strengthen the 
justice  system  and  the  anti-corruption  and  anti-money  laundering  capacity.  Measures  in  health, 
education, training and the labour market are expected to help strengthen social cohesion, while 
also contributing to the implementation of the European Pillar of Social Rights.  

The  measures  in  Malta’s  recovery  and  resilience  plan  are  expected  to  contribute  to  the 
green transition and environmental protection. The plan supports Malta’s decarbonisation and 
energy transition objectives, as set out in its 2030 national energy and climate plan (NECP), and 
are a step forward in achieving climate neutrality by 2050. Two of the six components in the plan 
include  expenditure  that  contributes  to  climate  objectives,  accounting  for  53.8%  of  the  plan’s 
total allocation. These mainly reflect sustainable transport investments (ferry landing site, electric 
vehicles)  and  energy  efficiency  interventions  in  buildings.  To  a  lesser  extent,  the  plan  also 
includes  renewable  energy  investments.  Waste  management  reforms  aim  to  strengthen  the 
circular economy.  The plan contains no measures with  biodiversity  as  their objective, although 
reductions  in  pollution  emissions  resulting  from  building  renovations,  the  decarbonisation  of 
transport  as  well  as  the  planned  strengthening  of  waste  management  may  indirectly  improve 
biodiversity.  All  measures  in  the  plan  have  passed  the  ex  ante  assessment  of  the  ‘do  no 
significant harm’ principle. In addition, for some measures this principle has been reflected in the 
milestones  and  targets  specified  in  the  Annex  to  the  Commission  Proposal  for  a  Council 
Implementing Decision. 

Malta’s  recovery  and  resilience  plan  is  expected  to  contribute  to  the  digital  transition. 
Measures supporting digital objectives represent 25.5% of the plan’s total allocation. Component 

1 Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the 
Recovery and Resilience Facility. 

5 

 
 
                                                           
3  is  fully  dedicated  to  the  digital  transition  and  aims  to  invest  in  the  further  digitalisation  of 
public  administration  and  public  services,  as  well  as  strengthening  initiatives  related  to  the 
digitalisation of the private sector. Components 4 and 6 also  address this objective by boosting 
digitalisation of the health and judicial systems. 

The  proposed  reforms  and  investments  are  expected  to  have  a  lasting,  positive  impact  on 
the functioning of the institutions, public administration and policies. Institutional changes to 
strengthen the independence and effectiveness of the justice system as well as the anti-corruption 
and anti-money laundering framework are expected to have lasting benefits on how the country’s 
institutions  function.  Digitalisation  is  expected  to  improve  access  to  and  the  efficiency  of 
government services to businesses and individuals. Healthcare provision is strengthened through 
investments and a broader and more digitalised service. Policy changes are also expected to bring 
about  lasting  benefits,  including  a  reduction  in  energy  consumption,  improved  air  quality, 
reduced noise pollution, better work-life balance and improved access, quality and resilience of 
educational services, bridging the gap between education provision and labour market needs.  

The implementation framework is robust, and milestones and targets are well thought-out. 
The Ministry responsible for the management of EU funds is the lead authority for implementing 
Malta’s  recovery  and  resilience  plan.  Within  this  Ministry,  the  Planning  and  Priorities 
Coordination Division, which is also the Managing Authority for other EU funds, has been tasked 
with leading the process. The plan also envisages close cooperation with the Ministry for Finance 
and  Employment,  which  leads  the  European  Semester  process.  The  milestones  and  targets  are 
suitable for monitoring the plan’s implementation, representing the key elements of the proposed 
investments and reforms. 

The plan provides sufficiently detailed information on the national set-up for the Recovery 
and Resilience Facility (RRF) internal control system. The outline of the control system put in 
place seems appropriate, and relevant actors have been identified across all levels. Management 
verifications  at  plan  level  have  been  clearly  defined.  The  plan  includes  main  elements  on  the 
audit work of the audit body and a commitment to prepare an audit strategy within three months 
of adopting the plan. The plan confirms that all investments will be financed solely by the RRF. 
This is further bolstered by structures put in place at national level to ensure consistency between 
funding and to avoid double funding. 

Malta  has  provided  estimated  costs  for  each  investment  included  in  the  recovery  and 
resilience  plan,  while  no  costs  were  associated  with  the  reforms. The  cost  breakdown  is 
generally  detailed  and  well-substantiated. The  assessment  of  the  cost  estimates  and  supporting 
documents  shows  that a  large  majority  of  the  costs  are  reasonable  and  plausible.  The  cost 
estimates  are  based  on  well-documented  comprehensive  calculations  and  sound  underlying 
assumptions.  In  addition,  the  estimated  total  cost  of  the  recovery  and  resilience  plan  is  in  line 
with  the  nature  and  type  of  envisaged  investments.  However,  in  some  limited  cases,  further 
supporting evidence and clearer justification for the assumptions made would have been needed 
to reach a fully positive assessment. The estimated total cost of the plan is commensurate with its 
expected economic and social impact and is in line with the principle of cost efficiency.  

6 

 
 
The Maltese plan includes a set of consistent, coherent and mutually reinforcing measures 
that  are  commensurate  with  the  overall  long-term  development  objectives.  Reforms  that 
strengthen the regulatory framework in the buildings sector and ensure a well-prepared workforce 
support the planned renovation of a number of private sector and public buildings, public schools 
and  hospitals.  Policies  that  promote  the  sustainability  of  the  transport  sector  strengthen  the 
government’s efforts for a modal shift to clean public transport together with the electrification of 
part of the bus fleet. Across components, initiatives taken to strengthen the government’s digital 
services  are  complemented  by  digitalisation  of  the  justice  system.  In  addition,  skilling  and 
upskilling is envisaged through different components, which sustain and complement each other. 
No cases have been observed where measures proposed within or across components contradict 
or undermine each other’s effectiveness. 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

Balan
ced 
respon
se 

CSRs 

DNS
H 

Grow
th, 
jobs
… 

Gree
n 
targe
t 

Digit
al 
targe
t 

Lasti
ng 
impa
ct 

 M  & 
T 

Costi
ng 

Coheren
ce 

Cont
rol 
Syste
ms 

A 

A 

A 

A 

A 

A 

A 

A 

B 

A 

A 

2.  RECOVERY AND RESILIENCE CHALLENGES: SCENE-SETTER 

2.1. Macroeconomic outlook and developments since the 2020 country report 

The Maltese economy went from growth of 5.3% in 2019 to a contraction of 7.8% in 2020. 
The COVID-19 pandemic badly affected Malta’s tourism sector2, while the general contraction of 
the  economy  was  partially  offset  by  a  steady  expansion  in  the  iGaming  and  financial  services 
industries. Investment fell mainly due to a large drop in construction, while private consumption 
was dampened by contractions in the retail, accommodation and food sectors. Inflation averaged 
0.8% in 2020, mainly due to subdued energy prices and lower inflation in services.  

Significant  measures  were  taken  to  support  the  economy3.  The  Maltese  stimulus  package 
amounted to 5.2% of GDP in 2020, including wage supplements, rent and electricity bill refunds, 
and interest rate subsidies on bank loans. Liquidity measures (i.e. guarantees and tax deferrals), 
which have no immediate impact on the deficit, amounted to 3.9% of GDP. The budget, which 

2 The total Maltese tourism sector is responsible for around 20% of total national employment  

(JRC publication ‘Behavioural changes in tourism in times of Covid-19’). In 2020, arrivals dropped by 65% 
(Eurostat). 

3   Partly financed by SURE and REACT-EU. 

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
has been in  surplus  since 2016, recorded a deficit of 10.1% in  2020 (Commission  2021 Spring 
Forecast).  Debt  increased  from  42.0%  of  GDP  in  2019  to  54.3%  in  2020.  The  emergency 
measures, together with  the pre-existing tax-benefit system, cushioned around two thirds of the 
household market income losses in Malta, with more than half of the effect due to the short-time 
work schemes4. Employment continued to increase in 2020, and unemployment figures increased 
only slightly from 3.6% in 2019 to 4.3% in 2020.  

The  macroeconomic  assumptions  that  underpin  Malta’s  recovery  and  resilience  plan  are 
plausible and project a sizeable rebound in economic growth in 2021. According to national 
projections, real GDP is set to increase by 3.8% in 2021, to then speed up to 6.8% in 2022. The 
national  forecast  expects  inflation  to  pick  up  to  1.3%  in  2021  and  1.5%  in  2022.  The 
unemployment rate projected in the plan is set to remain at 4.3% in 2021, declining to 3.9% in 
2022. According to the Commission’s 2021 Summer Forecast, real GDP is forecast to grow by 
5.6% in 2021 and 5.8% in 2022. The Commission expects more moderate growth in investment 
and a more dynamic rebound in private consumption in 2021. Similar to the national projections, 
the  Commission  Summer  forecast  expects  inflation  to  be  1.1%  in  2021,  increasing  to  1.6%  in 
2022. In addition, in the Commission Spring forecast, the unemployment rate is expected to be 
4.4%  in  2021,  falling  to  3.8%  in  2022.  Given  the  continued  budget  support,  the  Commission 
Spring  forecast  expects  government  deficit  and  debt  to  increase  further  in  2021,  to  11.8%  and 
64.7%  respectively.  The  macroeconomic  and  fiscal  outlook  continues  to  be  affected  by  high 
uncertainty related to the COVID-19 pandemic and its economic consequences. 

After a strong improvement, the risk of poverty or social exclusion has been stabilising in 
recent years, but some groups have been left vulnerable to the pandemic. Strong economic 
growth and job creation helped to reduce the risk of poverty or social exclusion in recent years to 
20.1%  in  2019  (compared  to  20.9%  in  the  EU).  However,  this  risk  remains  high  for  specific 
population groups, such  as  single earner households,  low-skilled adults, older people, and non-
EU  nationals.  As  these  are  also  the  groups  that  are  more  vulnerable  to  the  negative  economic 
impact  of  the  pandemic,  inequalities  and  risks  of  poverty  could  be  further  aggravated  by  the 
economic  slowdown.  The  high  number  of  early  school  leavers  (16.7%  in  2020)  and  poor 
educational  outcomes,  which  are  largely  determined  by  the  type  of  school  a  pupil  attends,  also 
limit  equal  opportunities.  Before  the  COVID-19  outbreak,  labour  and  skills  shortages  had 
increased and the labour market relied heavily on foreign workers, who represent almost a fourth 
of the Maltese labour force. The COVID-19 pandemic may exacerbate skills shortages in some 
sectors and redefine skills needs in others. 

4   Findings based on the Euromod model: see Christl, M., De Poli, S., Figari, F., Hufkens, T., Leventi, C., Papini, 
A. and Tumino, A. (2021) ‘The cushioning effect of fiscal policy in the EU during the COVID-19 pandemic’, 
JRC Working Papers on Taxation and Structural Reforms, 02/2021 (forthcoming); and Almeida, V., Barrios, S., 
Christl, M., De Poli, S., Tumino, A., Van der Wielen, W. (2020): ‘Households’ income and the cushioning effect 
of fiscal policy measures during the Great Lockdown’, JRC Working Paper on Taxation and Structural Reforms, 
06/2020, available at https://ec.europa.eu/jrc/sites/jrcsh/files/jrc121598.pdf.  

8 

 
 
                                                           
The fiscal position may be dented in the  medium  term by  the composition of government 
revenues  and  rising  ageing  costs  in  the  long  term.  For  several  years  before  the  COVID-19 
crisis,  the  Maltese  economy  had  experienced  fast  growth,  sustained  employment  growth  and  a 
declining debt-to-GDP ratio. However, Malta’s tax revenues rely largely on corporate taxes. This 
may  prove  volatile  given  the  slowing  economy  and  international  initiatives  in  the  area  of 
corporate  taxation  (e.g.  efforts  to  introduce  a  minimum  corporate  income  tax  rate  under  the 
OECD/G20  Inclusive  Framework  on  Base  Erosion  and  Profit  Sharing),  which  may  render 
Malta’s tax regime less attractive for investors. Positive fiscal outcomes in recent years have also 
been  supported  by  volatile  revenues  from  Malta’s  citizenship  scheme5,  whose  legality  is  being 
challenged by the European Commission. It sent a second letter of formal notice to Malta in June 
2021, voicing its concerns about  the revised citizenship scheme established at  the end of 2020. 
More  stable  and  growth-friendly  taxes  such  as  recurrent  property  taxation  and  environmental 
taxes  are  underused.  Sustainability  risks  are  low  in  the  short  and  medium  term,  but  the  S2 
sustainability gap indicator6 (5.6 % of GDP) suggests medium risks for fiscal sustainability. This 
is driven by a projected increase in ageing costs of 8 % of GDP by 2070 due to increasing public 
pension costs (3.8 % of GDP) and expenditure on healthcare and long-term care (4.5 % of GDP), 
albeit from a very low level. The macroeconomic and fiscal outlook continues to be affected by 
high uncertainty related to the COVID-19 pandemic and its economic consequences. 

Table 1: Comparison of macroeconomic developments and forecasts 

5 On 3 July 2020, amendments to the Maltese Citizenship Act were published in the government gazette. It 
announced that the citizenship scheme (IIP) will cease to exist, even if the 1,800-application limit is not reached by 
then. The scheme was replaced by a residency plan that can lead to citizenship. 
6 The S2 indicator shows the adjustment to the current structural primary balance required to fulfil the infinite 
horizon inter-temporal budget constraint, including paying for additional expenditure arising from ageing. 

9 

 
 
 
                                                           
2.2. Challenges related to sustainable growth, cohesion, resilience and policies for the next 

generation  

Smart, sustainable and inclusive growth  

The Maltese business environment has improved in recent years, particularly for small and 
medium-sized  enterprises  (SMEs),  but  gaps  in  access  to  finance  continue  to  limit  growth 
prospects.  While  the  loan  guarantee  scheme  introduced  during  the  COVID-19  outbreak  helps 
alleviate  immediate  liquidity  constraints,  capital  markets  remain  underdeveloped.  More  efforts 
are needed to increase the availability of non-bank finance and to address difficulties in access to 
credit.  

R&I continues to play a limited role in Malta’s economy7. The Maltese R&I system remains 
underfunded,  with  public  and  private  R&D  expenditure  having  experienced  flat  or  sluggish 
growth  rates  in  2010-20198.  The  weak  institutional  and  administrative  capacity  for  R&I  policy 
partly  accounts  for  the  limited  effectiveness  of  Malta’s  R&D  investment  and  policies.  The 
government set up the Ministry for Research, Innovation and the Coordination of Post Covid-19 
Strategy  in  December  2020,  a  welcome  step  towards  improving  R&I  governance.  Weak 
academia-business cooperation, the limited availability of researchers, talent and SMEs’ low R&I 
capabilities hamper innovation diffusion and technological catch up. 

7 However, innovation was shown to play a key role during the period of downturn. Maltese companies that kept 
innovating in 2020 were far less affected by the COVID-19 pandemic, almost halving the decrease in their income 
compared with non-innovative firms (JRC125490). 
8 Between 2010 and 2019, annual compound growth rates for public and private R&D expenditure stood at 0% and 
0.7% respectively (Eurostat). 

10 

20192023202420252026COMCOMRRPCOMRRPCOMRRPRRPRRPRRPRRPReal GDP (% change)5.5-7.8-7.05.6*3.85.8*6.8Employment (% change)6.62.94.11.12.21.93.5Unemployment rate (%)3.64.34.34.34.33.83.9HICP inflation (% change)1.50.80.81.1*1.31.6*1.5General government balance (% of GDP)0.4-10.1-11.8-5.5Gross debt ratio (% of GDP)42.054.364.765.5Source: Commission’s Summer interim Forecast (2021) (COM*), Commission’s Spring Forecast (2021) (COM),Malta’s Recovery and resilience plan (RRP)202020212022 
 
 
                                                           
Malta has launched a number of activities to promote digital skills among the population, 
map needs and to train ICT specialists. Recent initiatives have also targeted connectivity issues 
(including 5G). The lack of digital skills is holding back the digitalisation of companies. Malta is 
advanced on e-government and e-health, but the uptake by the population is rather low. Training, 
especially for low-income families, is of particular importance here. 

Social and territorial cohesion 

After  years  of  positive change,  the  social  situation  started  to  worsen in  2019.  The  share  of 
people  at  risk  of  poverty  or  social  exclusion  (20.1%)  was  still  slightly  below  the  EU  average 
(20.9%) in 2019, but started to increase after years of decline. Furthermore, the poverty-reducing 
impact of social transfers (other than pensions), at 26.3%, is still substantially lower than the EU 
average (32.4%) and also registered a decline in 2019. 

Women’s  participation  in  the  labour  market  remains  low.  Despite some  improvements,  the 
gender employment gap is still one of the highest in the EU (17.7 % in 2020, EU average: 11.1 
%). Work-life balance is still a concern in Malta, the employment rate of women still falls after 
the  age  of  40  and  the  share  of  inactive  women  due  to  care  responsibilities  is  high.  As  for  the 
gender pension gap, while it has improved in recent years, it remains one of the highest in the EU 
at 39.5% in 2019. 

Health and economic, social and institutional resilience 

The  health  system  delivers  good  outcomes,  but  its  resilience  and  sustainability  can  be 
further improved. Malta’s population  generally enjoys good health and has one of the longest 
life expectancies in the EU. In 2020, as a result of COVID-19, life expectancy at birth dropped 
from 82.9 to 82.6 years (a drop of less than 4 months, against an average drop of over 9 months 
across EU Member States). The unmet need for medical care is low, but low-income households 
report  much  higher  levels  than  the  rest  of  the  population.  Obesity  is  a  major  public  health 
challenge,  with  adult  and  childhood  obesity  rates  the  highest  in  the  EU.  In  2018,  Malta  spent 
9.0% of its  GDP on health, slightly below the EU average of 9.9%.  However,  a comparatively 
large  share  of  healthcare  costs  are  borne  by  household  out-of-pocket  costs.  At  the  same  time, 
demographic  ageing  puts  pressure  on  the  long-term  fiscal  sustainability  of  the  health  system. 
Malta  has  been  investing  in  health  promotion  and  prevention,  the  development  of  additional 
primary  care  capacity  and  the  introduction  of  an  e-health  system.  Further  redirecting  service 
delivery  away  from  hospitals  towards  primary  care  could  help  improve  efficiency  and  reduce 
public  spending.  Resilience  will  need  to  be  further  supported  by  tackling  some  long-standing 
issues, including the recruitment and retention of health professionals (against the background of 
high reliance on foreign workers, particularly among nurses) and long waiting lists for specialist 
outpatient services.  

Efforts  to  improve  the  anti-money  laundering  regulatory  and  supervisory  framework  are 
ongoing, but certain challenges remain. The financial services authority has begun to increase 
staff  levels  to  support  its  supervisory  role,  to  review  its  structure  and  anti-money  laundering 
oversight as well as its investigation and prosecution powers in that area. Several recent reforms 
aim to strengthen rule of law enforcement authorities in the fight against money laundering and 

11 

 
 
financial crimes more generally. Addressing concerns related to money laundering will be crucial 
to  prevent  criminals  from  misusing  the  EU’s  economy  during  the  recovery  and  will  have  an 
impact  on  the  country’s  capacity  to  retain  essential  financial  services,  improve  its  international 
reputation and maintain investor confidence. 

Further steps are needed to address aggressive tax planning practices. The issue of outbound 
payments of dividends, interest and royalties (i.e. payments exiting the EU to non-EU countries 
and  jurisdictions)  requires  attention  as  these  may  erode  the  EU  tax  base  through  significant 
amounts of payments made to other countries where recipient taxpayers are subject to very low or 
no corporate taxation. The citizenship and residence schemes also continue to pose a serious risk 
of tax evasion and need addressing. 

There  is  still  scope  for  further  progress  in  implementing  reforms  to  strengthen  the 
independence  of  the  judiciary.  On  29  July  2020,  the  Maltese  Parliament  adopted  four  laws 
relating to the justice reforms, namely a new act on the appointment of judges and magistrates, an 
act  on  the  removal  from  office  of  judges  and  magistrates,  an  act  on  the  judicial  review  of 
decisions  not  to  prosecute  and  an  act  on  the  Permanent  Commission  against  Corruption.  The 
Venice  Commission,  in  its  Opinion  of  8  October  2020,  welcomed  the  reforms  as  an  important 
step  in  the  right  direction,  but  recommended  amendments  to  the  adopted  acts,  to  be  addressed 
without  delay9.  These  mainly  reflect  the  need  for  greater  transparency  in  the  appointment  of 
members of the judiciary while further reducing political involvement, including on the selection 
of  the  Chief  Justice.  Other  recommendations  include  amendments  to  the  judicial  review  not  to 
prosecute,  the  transfer  of  summary  cases  to  the  Attorney-General,  as  well  as  increased 
independence of specialised tribunals.  

Action  is  still  needed  to  ensure  a  fully  separate  and  efficient  prosecution  service.  In  2019, 
Malta  passed  legislation  to  create  a  separate  prosecution  service  in  response  to  Venice 
Commission recommendations. As a first step, the Office of State Advocate was created to take 
over the non-prosecutorial functions that the Attorney-General had performed in the past. Cases 
will be transferred from the police to the Prosecution Service gradually. It is important to ensure 
that all prosecution functions, including summary offences, are transferred as soon as possible to 
the Attorney-General’s office and that this office has appropriate resources to operate.  

Policies for the next generation, children and young people, including education and skills 

Steps  have  been  taken  to  improve  education  and  training  participation  and  attainment 
rates,  but  significant  challenges  remain,  including  a  high  share  of  pupils  with  insufficient 
basic skills. The share of low-skilled people aged 15 to 64 is one of the highest in the EU (44.8% 
in  2020),  and  their  participation  in  training  is  low  (3.6%  in  2020).  Persistently  high  student 

9 Venice Commission, Opinion No. 993 / 2020 - CDL-AD(2020)019, 8 October 2020, Malta – Opinion on ten acts 
and bills implementing legislative proposals subject of Opinion CDL-AD(2020)006: 
https://www.venice.coe.int/webforms/documents/default.aspx?pdffile=CDL-AD(2020)019-e. 

12 

 
 
                                                           
underachievement and early school leaving  make it difficult to meet the need for skilled labour 
using  domestic  workers  alone.  The  implementation  of  the  policy  on  inclusive  education  for 
public schools has been delayed by the crisis. Strengthening monitoring and developing a holistic 
evaluation system would ensure more effective education policies and efficient investments. The 
inflow  of  foreigners  helped  to  mitigate  skills  shortages,  but  also  created  integration  and 
sustainability  challenges  through  rapid  population  growth.  Public  employment  services  and 
unemployment  protection  that  were  scaled  for  a  dynamic  labour  market  might  be  ill-suited  to 
dealing with  a situation where workers are likely to face longer spells out of work and to have 
greater re-training needs.  

2.3. Challenges related to the green and digital transition  

An  overarching objective of the RRF is  to support the twin transition.  Malta is  among the 
leading Member States in  digitalisation as measured by the 2020 Digital  Economy and Society 
Index. However, the country is lagging behind in reducing greenhouse gas (GHG) emissions not 
covered  by  the  EU  emissions  trading  system,  according  to  the  Commission’s  assessment  of 
Malta’s 2030 national energy and climate plan. Because of its location and given that the country 
is  densely  populated,  Malta  is  particularly  vulnerable  to  climate  risks.  It  will  need  to  take 
additional  corrective  measures  aimed  at  reducing  GHG  emissions  in  order  to  meet  its  targets, 
including  by  reducing  the  carbon  footprint  of  its  digital  sector.  This  section  focuses  on  where 
Malta stands in achieving targets related to the green and digital transition. 

Green dimension 

The recovery and resilience plan should contribute to the green transition, and at least 37% 
of the financial allocation needs to contribute to climate objectives. The measures in the plan 
are  expected  to  help  achieve  the  2050  climate  neutrality  objective  and  the  2030  energy  and 
climate  targets,  taking  into  account  Member  States’  national  energy  and  climate  plans.  They 
should  also  help  meet  environmental  targets  for  waste,  water,  pollution  control,  sustainable 
mobility,  biodiversity  protection  and  restoration  as  well  as  marine  and  water  resources.  In 
addition, the measures are set to support the transition to sustainable food systems as well as to a 
circular economy as appropriate, ensuring that nobody is left behind.  

Despite the fact that Malta’s climate targets are much lower than the EU average, it is not 
on  course  to  meet  them.  Based  on  Malta’s  projections,  the  Commission  estimates  in  its 
assessment of Malta’s 2030 national energy and climate plan10 that existing policies will not be 
sufficient to achieve a 19% reduction from 2005 levels in GHG emissions not covered by the EU 

10 Economidou, M., Ringel, M., Valentova, M., Zancanella, P., Tsemekidi Tzeiranak, S., Zangheri, P., Paci, D., 
Ribeiro Serrenho, T., Palermo, V. and Bertoldi, P., National Energy and Climate Plans for 2021-2030 under the EU 
Energy Union, EUR 30487 EN, Publications Office of the European Union, Luxembourg, 2020, ISBN 978-92-76-
27013-3, doi:10.2760/678371, JRC122862. 

13 

 
 
 
                                                           
emissions  trading  system  by  2030.  Although  Malta  has  one  of  the  lowest  GHG  emissions  per 
person in the EU, its absolute emissions are rising and are projected to increase further. 

Malta’s primary and final energy consumption, 0.9 and 0.7 Mtoe respectively in 2019, is not 
expected  to  reach  the  2020  targets  of  0.8  and  0.6  Mtoe  respectively.  Furthermore,  in  its 
NECP, the 2030 targets set for both primary and final energy consumption were considered very 
low ambition as Malta estimates that both values will have increased by then to 1.1 and 0.8 Mtoe 
respectively.  The  Commission  recommends  that  Malta  designs  and  invests  in  more  ambitious 
policies for the energy efficiency of its expanding building stock and transport system. 

Transport is one of the main targets for reducing emissions. Malta needs to make additional 
efforts to improve the sustainability of transport and reduce traffic congestion. Its dependence on 
road  transport,  together  with  an  inefficient  road  network,  moderate  fuel  taxes  and  a  firm 
preference for private transport have resulted in significant road congestion, noise, air pollutants 
and increased GHG emissions. There is scope to encourage sustainable collective transport and 
local access restrictions in order to reach both emission and congestion objectives. The external 
cost  of  road  transport,  including  from  air  pollution,  noise  and  congestion,  is  estimated  at  EUR 
400  million  a  year,  corresponding  to  3.6%  of  Malta’s  GDP,  and  is  rising.  The  NECP  includes 
specific plans to support e-mobility by increasing the number of electric vehicles and the roll-out 
of  electric  public  transport.  Malta  intends  to  strengthen  its  electric  vehicle  infrastructure  also 
through the Just Transition Fund. In 2021-2030, Malta plans to implement a biofuels substitution 
obligation, requiring fuel suppliers to blend biofuels with diesel. Providing ships that dock in the 
two  main  Maltese  ports  with  an  alternative  power  supply  to  the  burning  of  heavy  fuel  oil  will 
help reduce GHG emissions. 

Progress  is  still  needed  to  create  an  energy-efficient  building  stock  and  tap  into  the  large 
energy  savings  potential.  This  includes  renovating  residential,  services  and  public  sector 
buildings such as public schools and hospitals. Although residential buildings account for 84% of 
Malta’s  building  stock,  only  around  0.6%  are  renovated  each  year.  Investments  in  energy 
renovations  could  help  achieve  the  national  energy  and  climate  targets  while  keeping  energy 
poverty low. Progress is hampered, among other things, by skills shortages, low enforcement of 
minimum requirements and use of efficient materials and technologies and by competences being 
split between ministries and public bodies with responsibility for the building sector. Additional 
efforts  are  needed  to  target  energy  efficiency  renovations  and  promote  renewable  energy  in 
residential buildings, which use the largest share of energy11, including with measures to alleviate 

11 For an assessment of 2014 and 2017 Maltese long-term buildings renovation strategies, see: Castellazzi L, 
Zangheri P and Paci D. Synthesis Report on the assessment of Member States` building renovation strategies. EUR 
27722. Luxembourg (Luxembourg): Publications Office of the European Union; 2016. JRC97754; and Castellazzi 
L., Zangheri, P., Paci, D., Economidou, M., Labanca, N., Ribeiro Serrenho, T., Zancanella, P. and Broc, J., 
Assessment of second long-term renovation strategies under the Energy Efficiency Directive, EUR 29605 EN, 
Publications Office of the European Union, Luxembourg, 2019, ISBN 978-92-79-98727-4, doi:10.2760/973672, 
JRC114200. 

14 

 
 
                                                           
the  cost  for  low  income  households.  The  policies  introduced  in  the  renovation  strategy12  could 
lead to savings of over 60,000 GWh of primary energy in buildings by 2050, leading to emission 
reductions of 4.4 million tonnes CO2 (a reduction of 150,000 tonnes per year in 2030). In order 
to reach the targeted savings, the renovation rate will have to increase by 2.5 percentage points up 
to 2050.   This is expected to generate between 1,200 and 4,300 jobs per year.  

Malta  has  one  of  the  lowest  shares  of  renewables  in  energy  consumption  in  the  EU.  The 
country  could  still  meet  its  2020  renewable  energy  target  of  10%  either  via  own  production  or 
through a combination of own production and statistical transfers. In its NECP, Malta provides an 
indicative trajectory where the share of renewable energy is expected to reach 10.3%, 11.0% and 
11.6%  respectively  in  2022,  2025  and  2027.  The  NECP  expands  on  the  planned  policies  and 
measures  that  will  enable  it  to  achieve  the  contribution  and  sets  out  specific  relevant  sectoral 
measures. However, the 2030 target for renewable energy remains unambitious at 11.5% and is 
well below the minimum share of 21% resulting from the formula in Annex II of the Governance 
Regulation. 

Malta  still  faces  considerable  challenges  and  investment  needs  in  the  areas  of  waste  and 
water management, air quality, protection of habitats and species. Despite some progress in 
the  transition  towards  a  circular  economy,  waste  management  remains  a  challenge.  The 
considerable amount of landfilled waste, especially related to the construction sector, prevents the 
country  from  meeting  the  EU  recycling  targets  and  making  progress  towards  the  circular 
economy  objectives  on  waste  prevention  and  the  reuse  of  products.  In  this  vein,  sustainable 
construction using a life cycle analysis approach to both public buildings and private housing is 
critical  to  avoid  unnecessary  pressure  on  land  use  and  natural  resources  and  to  prevent  waste, 
while  also  managing  construction  demolition  waste  in  line  with  the  waste  hierarchy.  The 
challenge remains for water management as well, where action is needed to tackle the problem of 
water  scarcity  and  over-abstraction.  This  includes  completing  the  monitoring  schemes  for  the 
quantitative status of groundwater, introducing appropriate pricing policies and strengthening the 
control  and  enforcement  measures  related  to  the  prevention  and  reduction  of  diffuse  pollution 
including  nitrates,  agri-chemicals,  sediment  and  organic  matter.  In  addition,  air  pollution  and 
noise in the main cities would benefit from systemic solutions for reducing transport congestion, 
such as meaningful traffic restrictions or promoting the use of cleaner modes of transport. On the 
protection of habitats and species, Malta needs to complete the Natura 2000 designation process 
and  adopt  the  remaining  management  plans  for  marine  sites.  Clearly  defined  conservation 
objectives and necessary conservation measures need to be established for all sites. The provision 
of appropriate resources for their implementation is crucial in order to maintain or restore species 
and habitats of community interest to a favourable conservation status across their natural range. 
Furthermore,  the  illegal  trapping  and  killing  of  protected  species  remains  one  of  the  main 

12 Malta submitted the 2020 long-term renovation strategy to the Commission on 4 August 2021: 
https://ec.europa.eu/energy/sites/default/files/mt_2020_ltrs.pdf. 

15 

 
 
                                                           
 
challenges  in  Malta,  where  action  is  needed  to  strengthen  enforcement  of  EU  legislation  and 
where  investment  is  needed  in  education  and  awareness-raising  programmes  to  ensure 
compliance across the territory.  

The  table  below  gives  an  overview  of  Malta’s  objectives,  targets  and  contributions  under 
Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action. 

Table 2: Overview of Malta’s energy and climate objectives, targets and contributions 

National targets and 
contributions  

Latest 
available 
data 

2020 

2030 

Assessment of 
2030 ambition 
level 

Binding target for GHG emissions 
compared to 2005 under the 
Effort Sharing Regulation (ESR) 
(%) 

National target/contribution for 
renewable energy: share of energy 
from renewable sources in gross 
final consumption of energy (%) 

32 

5 

-19 

As in ESR 

8.5 
(2019) 

10 

11.5 

Unambitious 
(21% result of 
RES formula) 

National contribution for energy efficiency: 
Primary energy consumption 
(Mtoe) 

Final energy consumption (Mtoe) 

0.9 
(2019) 
0.7 
(2019) 

0.8 

1.1 

0.6 

0.8 

Very low 
ambition 
Very low 
ambition 

Level of electricity 
interconnectivity (%) 

24 

24 

24 

N/A 

Source: Assessment of the final 2030 national energy and climate plan of Malta, SWD (2020) 917 
final and Eurostat Energy Statistics for 2019 

Digital dimension 

The  recovery  and  resilience  plan  should  contribute  to  the  digital  transition,  and  at  least 
20% of the financial allocation needs to contribute to digital objectives. The measures in the 
plan  should,  among  other  things,  contribute  to  the  digital  transformation  of  the  economic  and 
social  sectors  (including  public  administration,  public  services  and  the  justice  and  health 
systems). The objective of the measures should be to improve not only the competitiveness, but 
also  the  resilience,  agility  and  security  of  companies  and  public  actors,  all  while  ensuring 
inclusiveness. 

Malta has made significant progress on digitalisation. According to the Commission’s Digital 
Economy  and  Society  Index  (DESI)  2020,  the  country  ranked  fifth  in  the  EU  (out  of  28 
countries). The National Digital Strategy 2014-2020 – currently being updated – set the vision of 

16 

 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
Malta as a ‘digitally enabled nation’ in all society dimensions. To achieve this ambition, existing 
gaps need to be closed and efforts are needed to further boost the digital transition.  

Maltese businesses have high levels of digitalisation, but there are differences between large 
companies and SMEs. In DESI 2020, Malta ranked seventh in the EU on integration of digital 
technology by businesses. Latest data broadly confirm this positive performance; in 2020, 71% of 
businesses in Malta had at least a basic level of digital intensity,13 well above the EU average of 
60%.  However,  there  are  differences  between  large  companies  and  SMEs.  In  addition,  despite 
recent  initiatives,  the  difficulty  in  finding  people  with  the  right  technical  skills  is  a  barrier  to 
further progress on digitalisation. In 2020, more than 66% of businesses reported difficulties in 
filling  vacancies  requiring  ICT  specialist  skills14.  Malta  has  several  programmes  in  place  to 
support business digitalisation (e.g. MITA Innovation Hub, MITA Emerging Technologies Lab), 
and  in  2019  announced  the  setting  up  of  a  digital  innovation  hub  dedicated  to  artificial 
intelligence. 

Malta  has  made  some  progress  in  equipping  its  people  with  suitable  skills  to  further 
progress on digitalisation, although skill shortages remain and the involvement of women is 
still limited. In DESI 2020, Malta ranked sixth in the EU on human capital. The country is one of 
the EU leaders in training ICT specialists (6% of all graduates, against the EU average of 3.9%), 
while it is in line with the EU average when it comes to basic digital skills (56% of people have 
at least basic digital skills in Malta, which equals the EU average)15. As mentioned above, skills 
mismatches and related skill shortages represent a challenge. Moreover, Malta has a high share of 
low-qualified adults, with around 33% of the workforce lacking the basic digital skills needed in 
the  majority  of  jobs  today16.  The  participation  of  women  in  the  digital  sector  remains  rather 
limited (in Malta, 11% of ICT specialists are women, against the EU average of 19%)17. Malta 
launched  the  comprehensive  National  eSkills  Strategy  (2019-2021),  covering  several  key  areas 
such  as  basic  digital  literacy,  quality  of  ICT  teaching,  advanced  skills  and  reskilling  and 
upskilling of the workforce. Additional efforts and targeted investments are essential to match the 
increasing  demand  for  skilled  labour,  boost  reskilling  and  upskilling  and  boost  the  economy’s 
digital  transformation.  In  parallel,  continued  efforts  are  needed  to  ensure  that  the  population 
acquires basic digital skills, in particular low income families, and to close the existing gaps. 

13 The digital intensity score is based on counting how many out of 12 selected technologies are used by businesses. 
A basic level requires usage of at least 4 technologies (Eurostat, Community Survey on ICT usage and eCommerce 
in Enterprises, 2020). 
14 Eurostat, Community Survey on ICT usage and eCommerce in Enterprises, 2020. 
15 European Commission, Digital Economy and Society Index 2020. Data is for 2019.  
16 European Commission, Digital Economy and Society Index 2020 (Indicator: Individuals with at least basic digital 
skills by employment status, data referred to is for 2019). 
17 Eurostat, Labour Force Survey, 2020.  

17 

 
 
                                                           
Malta scores very well in domestic broadband connectivity. In DESI 2020, Malta ranked 10th 
in  the  EU  on  connectivity.  100%  of  households  are  covered  by  very  high  capacity  networks18. 
The country boosted nationwide connectivity with speeds of 1 Gbps, but as of 2020 only 1.1% of 
households  subscribe  to  internet  services  with  this  speed19.  Malta  has  recently  published  a 
decision  paving  the  way  for  the  assignment  of  5G  spectrum20,  and  claims  to  have  started 
assigning spectrum in 5G pioneer bands. Malta also enjoys a strategic position as an international 
hub  for  north-south  and  east-west  connectivity  in  the  Mediterranean.  Works  are  ongoing  to 
connect Malta to Marseille and Egypt, which will expand the island’s international connectivity 
beyond the existing submarine cables that terminate in Italy. 

The country is well advanced in the offer of digital public services and has made efforts to 
increase their take-up by individuals and businesses. In DESI 2020, Malta ranked 11th in the 
EU  on  digital  public  services.  It  is  very  advanced  in  supplying  digital  public  services  to 
individuals  and  businesses,  including  in  the  re-use  of  information  across  administrations  to 
reduce compliance costs (by making available pre-filled forms). The share of e-government users 
has  improved  from  58%  in  2019  to  63%  in  2020,  although  it  remains  slightly  below  the  EU 
average  (64%).21  Further  efforts  are  required  to  increase  user  take-up  by  simplifying  services, 
targeting  the  sharing  and  reuse  of  information  already  acquired  by  the  government  and  further 
developing personalised, user-friendly and timely services, including the deployment of emerging 
technologies. On digitisation of the justice system, the digital strategy needs to be implemented to 
address  current  gaps,  in  particular  on  the  limited  possibility  to  file  and  follow  a  procedure  by 
electronic means. 

Maltese R&D spending is well below the EU average, and the R&D performance of the ICT 
sector  is  weak.  With  0.61%  of  GDP  allocated  to  R&D  in  2019,  the  country  has  much  lower 
R&D  expenditure  than  the  EU  average  of  2.20%.  Malta’s  National  R&I  Strategy  (2014-2020) 
identified  the  need  for  continued  investment  in  ICT  infrastructure  and  innovation  using  digital 
technologies.  However,  R&D  investments  also  remained  limited  in  the  ICT  sector.  The 
proportion of the government R&D budget allocated to the ICT sector is around 1%, well below 
the EU average of 7%. R&D expenditure by businesses in the ICT sector is also low and accounts 
for less than 3% of the value added in the sector22.  

Malta  has  paid  significant  attention  to  advanced  digital  technologies  in  recent  years.  The 
adoption of a strategy and regulatory framework dedicated to blockchain technology in 2018 is 

18  Broadband  coverage  in  Europe  studies  for  the  European  Commission  by  IHS  Markit,  Omdia  and  Point  Topic, 
2020.  
19 European Commission, through the Communications Committee (COCOM), and Eurostat-Community survey on 
ICT usage in households and by individuals.  
20 Decision MCA/D/21-4177 of 7 April 2021 (available here: 
https://www.mca.org.mt/sites/default/files/Assignment%20process%20for%20additional%20spectrum%20for%20wi
reless%20broadband%20electronic%20communications%20service.pdf).  
21 Eurostat-Community survey on ICT usage in households and by individuals, 2020.  
22 Digital Economy and Society Index 2020, The EU ICT sector and its R&D performance.  

18 

 
 
                                                           
one  example  of  the  country’s  ambition.  Malta  is  also  a  signatory  country  of  the  Blockchain 
Partnership Declaration (signed in April 2018), and of other relevant declarations, such as that on 
‘Building  the  next  generation  cloud  for  businesses  and  the  public  sector  in  the  EU’  (October 
2020). In 2019, the country also launched a national strategy on artificial intelligence (AI), based 
on three strategic pillars: investment,  start-ups and innovation, and speeding up the adoption of 
AI by the public and private sectors. Malta may  benefit from  translating  these policy strategies 
into concrete measures that aim to deploy advanced technologies across the public administration 
and  economic  sectors  in  order  to  help  boost  the  country’s  innovation  capacity  and  increase 
productivity. 

Figure 1: Digital Economy and Society Index (DESI) 2020 composite index summary 

Note: EU aggregate corresponds to the EU-28 based on the 2020 DESI report. 

19 

 
 
 
Box 1: Progress towards the Sustainable Development Goals 

Overview table of the overlap between the Sustainable Development Goals and the four dimensions 
plans
underpinning 

resilience 

recovery 

and 

the 

The  objectives  of  the  Sustainable  Development  Goals  (SDGs)  have  been  integrated  into  the 
European Semester since the 2020 cycle. This provides a strong commitment towards sustainability in 
19  EU  economic  and  employment  policies.  This  section  outlines  Malta’s  performance  on  the  SDGs,  in 
particular  relevance  on  the  four  dimensions  underpinning  the  Commission’s  2021  Annual  Sustainable 
Growth  Strategy.  It  is  also  of  relevance  to  the  recovery  and  resilience  plans  (green  transition,  fairness, 
digital  transition  and  productivity,  and  macroeconomic  stability),  indicating  possible  areas  where 
investments and reforms  in  line  with  the  objectives of  the  RFF  could further  accelerate  progress on the 
SDGs. 

Green transition 

Malta does not perform well on many SDGs related to the green transition. Although it has one of the 
lowest GHG emissions per person in the EU, its absolute emissions are rising and are projected to increase 
further. The country has not been able to combine high economic growth with lower GHG emissions. 

The  share  of  renewable  energy  in  Malta’s  gross  final  energy  consumption  (8.5%  in  2019)  is  well 
below  the  EU  average  (19.7%).  Further  reducing  the  carbon  intensity  of  the  Maltese  economy  would 
lead to progress on SDG 7 (Affordable and clean energy) and SDG 13 (Climate action). 

Fairness 

20 

 
 
 
Malta  performs  relatively  well  on  indicators  assessing  the  fairness  of  society  and  the  economy.  It 
performs  relatively  well  in  particular  on  SDG  1  (No  poverty).  The  rate  of  people  at  risk  of  poverty  or 
social exclusion (20.1% in 2019) is slightly below the EU average (20.9%). Malta also performs well on 
SDG 3 (Good health and well-being). It still has a way to go in improving its standing on SDG 4 (Quality 
education),  on  high  shares  of  early  school  leavers  and  low  tertiary  education  attainment.  The  gender 
employment gap related to SDG 5 (Gender equality) is particularly high in Malta. 

Digital transition and productivity 

Malta has a higher percentage of employment in high and medium technology manufacturing and 
knowledge-intensive sectors than the EU average. However, with 0.61% of GDP allocated to R&D in 
2019, it has substantially lower R&D spending than the EU average. By stepping up policy efforts, Malta 
could make further progress on the SDGs related to the digital transition and productivity. 

Macroeconomic stability 

In  recent  years,  Malta  has  showed  good  progress  overall  on  SDG  8  (Decent  work  and  economic 
growth),  with  fast  economic  growth  and  rapid  growth  in  employment.  There  is  still  room  for 
improvement in progressing towards the objectives of SDG 16 (Peace, justice, and strong institutions), in 
particular in contributing to a strong business environment. 

3.  OBJECTIVES, STRUCTURE AND GOVERNANCE OF THE PLAN 

3.1. Overall strategy of the plan  

The Maltese recovery and resilience plan aims to address Malta’s long-term challenges and 
help  the  country  overcome  the  socio-economic  impact  of  the  pandemic  while  seizing 
opportunities  for  the  green  and  digital  transition.  The  plan  presents  six  components  that 
broadly address the challenges identified as part of the European Semester and contributes to five 
of  the  seven  EU  flagship  initiatives.  The  plan’s  total  allocation  is  EUR  316,403,496.  This 
corresponds  to  the  financial  allocation  after  deduction  of  Malta’s  proportional  share  of  the 
expenses  under  Article  6(2)  of  Regulation  (EU)  2021/241,  calculated  in  accordance  with  the 
methodology  of  Article  11  of  that  Regulation.  The  estimated  total  costs  of  the  plan,  at  EUR 
344,900,000,  is  higher  than  the  plan’s  total  allocation.  The  plan  contributes  significantly  to  the 
green and digital transition, with 53.8% and 25.5% of the plan’s total allocation respectively (see 
table in the Annex). 

Component  1:  Addressing  climate  neutrality  through  enhanced  energy  efficiency,  clean 
energy and a circular economy 

This  component  helps  address  challenges  related  to  the  sharp  increase  in  energy 
consumption  and  waste  generation  resulting  from  rapid  growth  in  the  population, 
employment  and  GDP  in  recent  years.  Specific  characteristics  of  Malta,  including  its  small 
size, high population density, limited land space, lack of economies of scale, its dependence on 
single distributors and suppliers as well as the scarcity of natural resources, all exacerbate these 
challenges.  Investments  in  the renovation of private and public buildings are  complemented by 
reforms  to  support  the  long-term  renovation  strategy  and  to  improve  circularity.  These 

21 

 
 
 
investments  involve renovating  a number of private sector and public buildings, public schools 
and hospitals to make them more energy efficient and reduce carbon emissions. The component 
also  aims  to  build  a  near  carbon-neutral  school  that  will  include  the  use  of  renewable  energy 
systems  as  well  as  renewable  energy  investments  in  roads  and  public  spaces.  The  reform  to 
develop  a  long-term  building  renovation  strategy  complements  these  investments  by  creating  a 
framework  that  promotes  the  renovation  of  Malta’s  building  stock  by  2050.  It  also  envisages 
designing an enhanced waste policy, including the appropriate management of construction and 
demolition waste to improve circularity. 

This component has two reforms and five investments with a total cost of EUR 77.9 million. 
It contributes to the EU flagship initiative ’Renovate’ by promoting energy efficiency in private 
sector  and  public  buildings,  including  public  hospitals  and  public  schools,  while  devising  a 
strategy to promote the benefits of green buildings among the general public. It also contributes 
to the EU flagship initiative ’Power-up’ by investing in renewable energy in buildings, roads and 
public spaces.  

Component 2: Addressing carbon neutrality by decarbonising transport 

This component of the Maltese recovery and resilience plan helps address the challenge of 
traffic congestion, GHG and pollutant emissions, and the need to make the transport sector 
more  sustainable.  The  objective  is  to  shift  traffic  from  road  to  more  sustainable  modes  and 
decarbonise  road  transport  through  electrification,  in  line  with  Malta’s  national  energy  and 
climate  plan  for  2030,  the  2050  Low  Carbon  Development  Strategy,  the  National  Reform 
Programme  (2020)  and  National  Transport  Strategy.  Such  reforms  improve  transport  planning, 
increase the use of public transport and implement measures in the Sustainable Urban Mobility 
Plan for the Valletta region. They also designate regeneration areas, promote remote working in 
the public sector and increase the efficiency of the public sector vehicle fleet. Investments include 
the  construction  of  a  ferry  landing  site,  a  scrappage  scheme  supporting  the  purchase  of  zero-
emission  electric  vehicles  in  the  private  sector,  renewal  of  the  public  sector  vehicle  fleet  with 
zero-emission  electric  vehicles  and  the  purchase  of  zero-emission  electric  buses  for  public 
transport.  

This  component  has  six  reforms  and  four  investments  with  a  total  cost  of  EUR  110.4 
million. It contributes to the EU flagship initiative ‘Recharge and Refuel’ by promoting the use 
of cleaner vehicles as well as creating incentives to encourage a modal shift. 

Component 3: Fostering a digital, smart and resilient economy 

This component helps address the challenges related to further digitalisation in the public 
and private sectors.  It helps improve the resilience, capacity and security of the government’s 
digital  backbone,  access  to  digital  technology,  the  range  and  quality  of  e-government  services, 
uptake of those services by individuals and businesses, and digitalisation of the private sector. It 
also  helps  address  the  challenge  of  improving  Malta’s  performance  in  R&I,  where  Malta  is 

22 

 
 
ranked as a ‘moderate innovator’ according to the European Innovation Scoreboard 202123. The 
objective  is  to  fast-track  the  digital  transition  by  strengthening  the  national  policy  framework, 
investing  in  the  further  digitalisation  of  public  administration  and  public  services  (to  increase 
their  range,  quality  and  uptake),  as  well  as  supporting  the  digitalisation  of  businesses,  in 
particular SMEs. The component also aims to improve Malta’s R&I performance by promoting 
business R&I and improving public-private cooperation.  

This  component  has  two  reforms  and  four  investments  with  a  total  cost  of  EUR  55.3 
million.  It  targets  the  EU  flagship  initiative  ‘Modernise’  by  promoting  up-to-date  and  secure 
digital services.  

Component 4: Strengthening the resilience of the health system 

This  component  helps  address  the  challenges  experienced  by  Malta’s  healthcare  sector, 
which faces greater demands due to an ageing population. The objective is to strengthen the 
resilience of the health sector by improving digitalisation of the health system. This will focus on 
further  facilitating  the  uptake  of  telemedicine,  improved  diagnostic  and  curative  capacities  in 
cancer  care,  improving  staff  management  and  reducing  Malta’s  dependency  on  other  countries 
for  blood,  tissue  and  cell  therapies  needed  in  medical  interventions  and  treatments.  The 
component contains a reform aimed at improving staff management and addressing obstacles to 
hiring and retaining foreign healthcare workers, also by improving their well-being. The reform 
also includes prevention measures related to child health. The second reform addresses regulatory 
barriers  that  may  hamper  the  full  exploitation  of  the  investment  in  the  Blood,  Tissue  and  Cell 
Centre.  In  addition,  the  component  includes  an  investment  in  establishing  a  Blood,  Tissue  and 
Cell Centre within close proximity of the main hospital in Malta. The second investment consists 
of  three  projects  to  improve  the  resilience  of  the  health  system  through  digitalisation  and  new 
technologies.  

This component has two reforms and two investments with a total cost of EUR 49.9 million. 
Its second investment addresses the EU flagship initiative ‘Modernise’ by digitalising the health 
system. 

Component 5: Enhancing quality education and fostering socio-economic sustainability 

This  component  addresses  the  challenges  of  high  shares  of  early  school  leavers  and  low-
skilled  adults,  widespread  skills  shortages  and  the  need  to  improve  the  quality  and 
inclusiveness of the education and training system. It further assesses the current pension and 
unemployment benefits system to continue pursuing policy reforms that ensure they are adequate 
and  sustainable.  Its  objective  is  to  make  Malta’s  workforce  and  society  more  resilient,  also  in 
light of the green and digital transition. 

23 European Commission, ‘European Innovation Scoreboard 2021’, 21 June 2021. 

23 

 
 
                                                           
 
This component has six reforms and one investment with a total cost of EUR 41.4 million. It 
takes the EU flagship initiative ‘Reskill and upskill’ into account by strengthening the quality and 
inclusiveness  of  Malta’s  education  and  training  system  in  general  and  improving  initial  and 
continuous  vocational  education  and  training  in  particular.  This  should  help  equip  Maltese 
society with the skills needed in the current and future labour market. 

Component 6: Strengthening the institutional framework 

This component addresses a number of institutional and governance challenges in the area 
of justice, the fight against corruption and money laundering, and taxation. On the justice 
system,  these  challenges  relate  to  the  independence  of  the  judiciary,  the  lack  of  a  separate 
prosecution  service  from  the  investigative  branch,  as  well  as  inefficiencies  that  could  be  partly 
addressed  through  further  digitalisation.  Challenges  in  the  governance  framework  relate  to 
effective detection and prosecution of corruption and money laundering cases. On taxation, some 
features  of  the  tax  system  may  have  made  aggressive  tax  planning  practices  easier  for  both 
companies  and  individuals.  Reforms  to  improve  the  justice  system  include  changes  to  how  the 
judiciary are appointed and dismissed. An independent review will also be undertaken to assess 
the independence of the specialised tribunals and implement necessary remedial action to ensure 
their  independence.  The  institutional  framework  capacity  to  fight  corruption  is  expected  to  be 
strengthened  by  implementing  the  capacity  building  elements  of  the  national  anti-fraud  and 
corruption strategy, reforming the asset recovery bureau and through reforms targeting a key anti-
corruption body, namely the Permanent Commission Against Corruption. To strengthen criminal 
investigations,  including  corruption  and  money  laundering,  reforms  include  a  new  appointment 
procedure for the Commissioner of Police. On the prosecution front, the component proposes the 
creation of a separate prosecution service, while also implementing a judicial review of decisions 
not  to  prosecute by the  Attorney-General.  Measures  to  strengthen the system to  counter money 
laundering  and  the  financing  of  terrorism  are  also  put  forward.  In  addition,  four  reforms  target 
aggressive  tax  planning  by  (i)  limiting  the  tax  exemption  for  dividends  coming  from  countries 
placed  on  the  ‘Code  of  Conduct  Group’  list  of  non-cooperative  jurisdictions;  (ii)  introducing 
transfer  pricing  legislation;  (iii)  carrying  out  a  study  followed  up  by  legal  amendments  on 
measures  relating  to  inbound  and  outbound  dividends,  interest  and  royalty  payments;  and  (iv) 
spontaneously  exchanging  information  on  applicants  receiving  Maltese  citizenship  under  the 
citizenship  scheme  with  their  original  tax  jurisdictions.  This  component  also  includes  one 
investment  that  aims  to  improve  the  quality  and  efficiency  of  the  judiciary  system  through 
digitalisation. 

This  component  has  12  reforms  and  one  investment  with  a  total  cost  of  EUR  10  million. 
Several elements of this component are retroactive, having already, been implemented in part in 
2020 and early 2021. It also addresses the EU flagship initiative ‘Modernise’ through efforts to 
digitalise the justice system. 

Table 3: Components and associated costs 

Component 

Costs (EUR million) 

24 

 
 
 
C1: Addressing climate neutrality through enhanced 
energy efficiency, clean energy and a circular economy 
C2: Addressing carbon neutrality by decarbonising 
transport  
C3: Fostering a digital, smart and resilient economy 
C4: Strengthening the resilience of the health system 
C5: Enhancing quality education and fostering socio-
economic sustainability 
C6: Strengthening the institutional framework 
Total 

3.2. Implementation aspects of the plan  

Consistency with other programmes  

77.9 

110.4 

55.3 
49.9 
41.4 

10 
344.9 

The  plan  is  consistent  with  the  other  main  EU  and  national  programmes.  Malta’s 
Sustainable  Development  Vision  for  2050  sets  out  the  overarching  framework  of  its  long-term 
development. It is based on three thematic priorities: 

  enhancing economic growth; 
  safeguarding our environment; and 
  social cohesion and well-being. 

Malta  intends  to  use  this  strategy  as  a  framework  for  the  instruments  supporting 
development  over  the  next  decades.  Financial  support  from  the  RRF,  the  Partnership 
Agreement  for  2021-2027  (and  subsequent  operational  programmes)  and  other  EU  funds  (both 
under  shared  and  direct  management),  as  well  as  national  funding,  is  expected  to  complement 
each  other  to  ensure  integrated  planning  and  coordinated  implementation  of  the  long-term 
development strategy.  

The recovery and resilience plan appears to be coherent with cohesion policy funds, which 
will remain the main EU financing instrument for economic development. EU structural and 
investment funds are expected to remain the main EU instrument  for financing  socio-economic 
development  in  Malta.  The  country  will  gain  access  to  EUR  1.923  billion  from  the  EU’s  core 
2021-2027  multi-annual  financial  framework  budget  as  well  as  EUR  329  million  in  non-
repayable  support  from  the  NextGenerationEU  instrument,  totalling  EUR  2.25  billion  over  the 
next 7 years. 

The  recovery  and  resilience  plan  is  expected  to  be  a  key  instrument  for  the  climate 
transition. It includes measures that directly or indirectly contribute to the national objectives of 
Malta’s  2030  national  energy  and  climate  plan  and  Sustainable  Development  Vision  for  2050, 
which are used as key input in the strategic framework for the whole plan. Consistent investments 
are included under Component 1. These aim to promote the decarbonisation of buildings and the 
use  of  renewable  energy  solutions,  while  introducing  reforms  to  develop  a  long-term  building 
renovation strategy and improving waste management. Under Component 2, reform measures to 

25 

 
 
 
improve  transport  planning,  increase  the  use  of  public  transport  and  implement  actions  of  the 
sustainable urban mobility plan for the Valletta region are complemented by investments. These 
include  the  construction  of  a  ferry  landing  site,  a  scrappage  scheme  to  get  more  people  to  buy 
zero-emission  electric  vehicles,  renewal  of  the  public  sector  vehicle  fleet  with  zero-emission 
electric vehicles, and the purchase of zero-emission electric buses for public transport. 

Malta intends to ensure complementarity between the recovery and resilience plan and its 
National Youth Policy Plan. Various measures are included under Component 5 (Education and 
socio-economic  sustainability)  to  prevent  early  school  leaving  and  to  increase  guidance  and 
opportunities for upskilling and reskilling of all adults, in particular low-skilled adults. Additional 
measures are envisaged to boost inclusiveness and the quality of education for pupils with special 
needs  and  to  improve  the  education  policy  monitoring  system.  Furthermore,  the  proposed 
investment to set up a centre for vocational education excellence (by building a new campus for 
the  Institute  for  Tourism  Studies)  will  include  a  new  faculty,  practice  facilities,  an  incubation 
centre  to  support  entrepreneurship,  an  R&D  centre  to  encourage  innovative  ideas  and  early 
childhood  education  and  care  facilities  to  enable  people  with  unpaid  care  responsibilities, 
especially women, to attend courses. 

The  recovery  and  resilience  plan  is  expected  to  support  the  digital  transition.  The  plan 
includes measures that directly or indirectly contribute to the national objectives of Malta’s draft 
digital  strategy.  Although  not  funded  under  the  recovery  and  resilience  plan,  Component  3 
includes a number of reforms to reduce the digital divide, promote digital skills, improve digital 
public services and boost innovation. Investments are targeted at strengthening the government’s 
digital  backbone  and  digital  solutions,  digitalising  the  Merchant  Shipping  Directorate  and 
improving the delivery of digital public services for individuals and businesses. The component 
also  supports  the  uptake  of  digital  technologies  by  businesses,  including  SMEs,  through  a 
dedicated  grant  scheme.  These  efforts  are  complemented  by  other  investments  included  under 
Component 6 to strengthen the digitalisation of the justice system in line with the Digital Justice 
Strategy and under Component 4 to digitalise certain operational processes and workflows in the 
healthcare sector. 

Consistency  with  the  challenges  and  priorities  identified  in  the  most  recent  euro  area 
recommendation 

The  recovery  and  resilience  plan  is  broadly  consistent  with  the  challenges  and  priorities 
identified in the most recent Council Recommendation on economic policy in the euro area 
(EAR). The plan ensures a supportive policy stance to recovery by promoting key investments, 
strengthening  growth  potential  and  creating  jobs.  It  directly  addresses  EAR  1  as  it  implements 
measures  that  help  make  the  health  system  more  resilient.  The  plan  includes  reforms  and 
investments that aim to reduce dependency on other countries for blood, tissue and cell therapies 
and that make it easier to hire and retain health professionals (Component 4). In the area of social 
policy,  the  plan  includes  reforms  and  investments  to  assess  and  review  unemployment  benefits 
and the pension system to ensure they are adequate and sustainable (Component 5).  

The  plan  also  contributes  to  EAR  2  by  further  improving  convergence,  resilience,  and 
sustainable and inclusive growth.  Components 1, 2 and 3 include investments and reforms to 

26 

 
 
sustain  the  climate  transition,  circular  economy  and  the  digital  transformation  of  the  country. 
Component  5  aims  to  strengthen  early  school  leaving  prevention  and  intervention,  expand 
guidance  and  opportunities  for  upskilling  and  reskilling  of  all  adults,  especially  low-skilled 
adults, and improve access to mainstream education for pupils with special needs. It also includes 
measures  to  strengthen  labour  market  policies  and  build  a  vocational  training  centre  that  will 
incorporate  an  incubation  centre,  an  R&D  centre  to  encourage  innovative  ideas  and  early 
childhood  and  care  facilities  to  facilitate  training.  Component  6  includes  reforms  to  curb 
aggressive tax planning.  

The plan addresses EAR 3 on strengthening national institutional frameworks. Component 
6 includes measures to improve the governance of the justice system, including by changing the 
appointment  and  dismissal  procedures  of  the  judiciary  and  ensuring  the  independence  of 
specialised  tribunals.  The  institutional  framework  to  tackle  corruption  will  be  strengthened  by 
establishing  an  independent  prosecutor,  implementing  the  administrative  capacity  building 
measures  envisaged in  the national  anti-fraud and corruption strategy and additional reforms  to 
strengthen the national  anti-corruption body. On anti-money laundering, Component 6 commits 
Malta 
the  action  plan  on  national  anti-money 
laundering/combating terrorist financing/targeted financial sanctions and to implement any action 
required  by  the  Financial  Action  Task  Force,  the  inter-governmental  body  setting  out 
international standards on anti-money laundering and combatting terrorist financing. Components 
3, 4 and 6 include investments to fast-track digitalisation of the public administration, health and 
justice systems.  

implementation  of 

to  complete 

Administrative organisation  

The  plan  establishes  a  coherent  and  consistent  administrative  framework  for  its 
implementation. The Ministry responsible for the management of EU funds, which is the Office 
of the Prime Minister, acts  as a coordinating  authority for the recovery  and resilience plan, the 
Partnership Agreement and other EU funds for 2021-2027. This is expected to ensure a coherent 
and consistent approach to programming and implementation. The aim is to maximise EU fund 
absorption,  complementarity  between  various  funding  streams  and  enable  a  smooth  transition 
between different programming periods.  

The coordinating authority is empowered to fulfil the relevant tasks related to management 
and  control  and  to  ensure  that  the  EU’s  financial  interests  are  protected.  This  includes  (i) 
verifying that the milestones and targets are fulfilled in accordance with strategic and operational 
objectives;  (ii)  implementing  an  internal  management  and  control  system  to  prevent  and  detect 
irregularities  and  take  appropriate  corrective  actions;  (iii)  putting  in  place  effective  and 
proportionate anti-fraud measures according to the risks identified; (iv) ensuring the efficient and 
timely collection of monitoring data; (v) establishing a computerised system to record operational 
data; (vi) ensuring that the beneficiaries maintain a separate accounting system or an appropriate 
transaction code; (vii) and carrying out ex post assessments to evaluate the results of the recovery 
and resilience plan. 

27 

 
 
The  plan  sets  out  a  clear  administrative  structure  for  its  implementation.  This  includes 
several key governance layers: 

  An RRP Task Force, including representative departments from the Ministry responsible 
for the management of EU funds and the Ministry for Finance and Employment, tasked 
with providing coordinated leadership and focused monitoring. 

  The Planning and Priorities Coordination Division within the Ministry responsible for the 
management  of  EU  funds,  entrusted  to  fulfil  all  the  relevant  tasks  related  to  the 
management and control of the plan’s implementation. 

  The  recovery  and  resilience  plan  beneficiaries  responsible  for  implementing  the 
interventions required by the plan’s components, including the achievement of milestones 
and targets. 

  The  Line Ministry  responsible for ensuring inter-agency coordination for more complex 

plan-related measures, overseeing and providing support to beneficiaries. 

  The Audit Authority, the designated audit authority for the recovery and resilience plan. 

The recovery and resilience plan benefits from the experience acquired with cohesion policy 
funds  within  a  common  coordination  and  governance  framework.  This  should  allow  for  a 
consistent  approach  to  planning,  programming,  management,  implementation,  and  control  and 
audit.  Within  the  Ministry  responsible  for  the  management  of  EU  funds,  the  Planning  and 
Priorities  Coordination  Division  has  been  designated  to  provide  leadership,  coordination  and 
oversight while extending the EU cohesion policy funds governance framework to the recovery 
and  resilience  plan.  In  addition,  an  institutional  framework  that  mainstreams  sustainable 
development  across  the  government  layers,  coordinated  by  the  Ministry  for  the  Environment, 
Sustainable  Development  and  Climate  Change,  supports  the  implementation  of  Malta’s 
Sustainable  Development  Vision.  Technical  support  can  be  requested  under  the  Technical 
Support  Instrument  to  assist  Member States in the implementation  of the  plan. This  instrument 
provides  expertise  in  building  capacities  to  implement  the  plans  in  a  number  of  areas  such  as 
health,  justice,  reform  of  the  tax  courts,  green  and  digital  transitions,  public  administration 
reforms, as well as for the overall implementation of the plan. Sectorial support to policy reforms 
could also be provided by the Horizon Policy Support Facility, which gives Member States and 
countries  associated  to  Horizon  Europe  practical  support  to  design,  implement  and  evaluate 
reforms  that  enhance  the  quality  of  their  research  and  innovation  investments,  policies  and 
systems. 

Gender equality and equal opportunities for all 

The plan contains a series of measures that are expected to help address the challenges in 
the  area  of  gender  equality  and  equal  opportunities  for  all.  Particularly  relevant  measures 
include those that aim to (i) improve the provision of childcare services as part of the new Centre 
for  Vocational  Education  Excellence  (ITS  Campus),  encouraging  people  with  unpaid  care 
responsibilities, especially women, to  attend courses; (ii) promote remote working solutions for 
the  public  administration,  enabling  a  better  work-life  balance;  and  (iii)  implement  measures 
included  in  the  forthcoming  Employment  Strategy  on  older  workers  (aged  55-64),  low-skilled 

28 

 
 
adults and the  gender employment  gap. The construction of the near-carbon-neutral school will 
also feature early childhood education and care infrastructure for around 120 pupils contributing 
to equal opportunities for all children.  

The plan also includes measures to improve the integration and well-being of foreign workers in 
the  health  sector  as  well  as  an  e-Learning  Centre  focusing  on  the  requirements  of  the  Human 
Rights Directorate, providing among other things language training, cultural orientation and one-
stop  shop  integration  facilities  to  thousands  of  foreign  workers.  Granting  access  to  free  public 
transport to around 100,000 people, in addition to the current groups already enjoying free public 
transport, will particularly benefit those dependent on and frequently using public transport. It is 
noteworthy  that  Malta  includes  the  adoption  and  implementation  of  measures  from  its  updated 
National Inclusion Policy together with a dedicated reform measure to improve quality inclusive 
education for pupils with special needs. It also includes measures from its first Gender Equality 
and  Mainstreaming  Strategy  Action  Plan,  including  tackling  gender  stereotypes  and  collecting 
disaggregated data to further support evidence-based policymaking. In addition, Malta highlights 
that all reforms and investments will be implemented in line with its National Disability Strategy.  

Reforms and investments to reduce early school leaving and to expand upskilling und reskilling 
opportunities  for  all  adults,  in  particular  for  low-skilled  adults,  are  expected  to  benefit  young 
students  and  people  from  vulnerable  socio-economic  backgrounds,  including  those  with 
migration  backgrounds.  The  plan  further  includes  a  programme  to  help  families  with  low 
incomes  get  connected  and  have  access  to  computers  as  well  as  related  knowledge.  This  will 
improve digital literacy, reduce the digital divide and improve socio-economic cohesion. 

Consultation process 

The Maltese authorities consulted over 145 bodies to determine the main policy objectives 
for EU funding, including the RRF. Five committees were established in 2020 to focus on the 
main policy objectives under the Common Provisions Regulation and the wider investment needs 
of  the  country.  Meetings  were  held  to  address  various  topics,  including  economic  growth,  the 
digital and green transition, environment, transport, social cohesion, education and health as well 
as  Gozo’s  territorial  needs.  Stakeholders  included  government  bodies,  urban  and  other  public 
authorities,  civil  society,  environmental  bodies,  and  bodies  representing  social  inclusion, 
fundamental rights, rights of people with disabilities,  gender equality and non-discrimination of 
young  people,  among  others.  The  outcomes  of  such  consultations  provided  insights  into 
stakeholders’  positions  on  the  needs  and  investment  priorities  necessary  for  Malta’s  socio-
economic  development.  They  also  served  as  an  important  contribution  towards  identifying 
reforms and investments for Malta’s recovery and resilience plan.  

In 2021, several bilateral meetings were also held with different stakeholders, including possible 
beneficiaries, with the focus on the recovery and resilience plan in particular. The broad outlines 
of the plan were also discussed with the Malta Council for Economic and Social Development, 
which  represents  the  main  employer  bodies,  trade  unions  and  civil  society  as  well  as  the 
government. Consultations on implementation of the plan in Malta will be carried out broadly in 
line with the consultation framework adopted for the European Semester. These will be steered 

29 

 
 
by  the  Ministry  responsible  for  the  management  of  EU  funds,  in  close  collaboration  with  the 
Ministry for Finance and Employment.  

Security self-assessment 

Under  Article  18(4)(g)  of  the  RRF  Regulation,  Malta’s  plan  includes  a  security  self-
assessment for the relevant investments in digital capacities under Components 3, 4 and 6 
(in  relation  to  strengthening  the  government’s  digital  backbone,  digitalisation  of  the  Merchant 
Shipping  Directorate,  digitalisation  of  public  administration,  including  the  provision  of  digital 
tools  for  remote  working  solutions,  digitalisation  of  the  healthcare  system  and  justice  system). 
The  plan  explains  that,  as  part  of  the  procurement  process,  the  technical  designs  will  be 
scrutinised by the Malta Information Technology Agency, in particular to ensure they are in line 
with  baseline  security  standards.  Suppliers  will  also  be  expected  to  follow  the  government’s 
information  security  policies.  In  addition,  the  relevant  service  contracts  with  the  suppliers  will 
include  a  specific  security  schedule  to  cater  for  risks  related  to  data,  supply  chain,  business 
continuity, supplier processes and equipment.  

Moreover,  consideration  will  be  given  to  ensure  that  services  are  provided  in  line  with  EU 
legislation,  including  the  General  Data  Protection  Regulation  (EU)  2016/679,  with  specific 
contractual clauses. Furthermore, the plan lists specific measures that will be implemented in the 
design  of  the  relevant  solutions  to  mitigate  cyber-security  risks.  This  includes  data  encryption, 
network segmentation, intrusion detection systems, audit logs, identity management integration, 
multi-factor  authentication,  the  use  of  secure  cloud  services  based  in  the  EU,  etc.  Strategic 
measures  mentioned  in  the  security  self-assessment  would  need  to  be  closely  monitored  when 
implementing the plan. 

Cross-border and multi-country projects 

There are no major projects with a cross-border or multi-country perspective included in 
the recovery and resilience plan. The investment in digitalisation of the health sector (related to 
the  installation  of  Magnetic  Resonance  Linear  Accelerator  (MR  Linac)  equipment)  offers 
opportunities to participate in international networks. 

Communication strategy 

The recovery and resilience plan broadly outlines Malta’s communication plans. The outline 
of the communication strategy aims to provide a coordinated, recognisable and simple message 
that highlights the impact of the plan on the economy and socio-economic well-being of Maltese 
citizens. The objectives of the strategy include: 

 

raising awareness about the recovery and resilience plan and its scope; 

  communicating and promoting the adoption of the plan, and any amendments to it, where 

relevant; 

  promoting implementation of the plan; 

  publishing the list of projects funded under the plan; 

30 

 
 
  helping project beneficiaries understand publicity requirements and their fulfilment; 

  publishing  visual  identity  guidelines  and  publicity  material  to  be  used  by  all  supported 
projects to ensure appropriate and consistent recognition of the assistance received; and 

  promoting the role of the plan and the EU’s contribution in meeting national objectives. 

Publicity  actions  will  be  differentiated  according  to  the  target  audiences.  They  will  range 
from  the  general  public  to  more  targeted  multipliers  of  the  communicated  message  and 
beneficiaries, implementing stakeholders, as well as the users of the infrastructure and training of 
the actions being supported. 

The  recovery  and  resilience  plan  is  expected  to  be  promoted  among  the  public  through 
various communication channels. These include audio-visual, social and web media, as well as 
print  media,  promotional  material,  signage,  and  participation  in  local  events.  Malta  stated  its 
intention to create a website to provide visibility on the initiatives funded under this plan. 

Appropriate  communication  measures  are  set  to  accompany  all  proposed  reforms  and 
investments in the plan. The focus is expected to be on health-related interventions, education 
and decarbonisation efforts in buildings and transport. For the implementation of communication 
and  information  activities,  an  indicative  budget  of  EUR  250,000  is  expected  to  be  allocated  to 
such  interventions.  A  point  of  contact  for  coordinating  communication  activities  related  to  the 
plan should be designated. Coordination between EU and national authorities should be pursued 
to  maximise  the  impact  and  effectiveness  of  communication,  and  to  ensure  awareness  of  the 
RRP’s contribution to the Maltese and European recovery and to the twin transition. 

Malta  aims  to  accompany  implementation  of  the  communication  strategy  by  monitoring 
and  evaluation  activities.  To  this  end,  an  output  indicator  aims  to  quantify  the  number  of 
publicity  activities  carried  out  by  2026.  Furthermore,  as  part  of  its  evaluation  activities,  the 
Planning and Priorities Coordination Division in the Office of the Prime Minister plans to carry 
out an annual survey that provides an objective assessment of the public’s knowledge, awareness 
and  perception  of  EU-funded  interventions  in  Malta.  The  annual  survey  is  set  to  be  adapted  in 
order to take into account measures and interventions under the plan. 

State aid 

State aid and competition rules fully apply to the measures funded by the RRF. EU funds 
channelled through the authorities of Member States, like the RRF, become State resources and 
can constitute State aid if all the other criteria of Article 107(1) Treaty on the Functioning of the 
European Union (TFEU) are met. When this is the case and State aid is present, Member States 
must  notify  these  measures  to  the  Commission  and  acquire  approval  before  they  can  grant  the 
aid, unless those measures are covered by an existing aid scheme or comply with the applicable 
conditions  of  a  block  exemption  regulation,  in  particular  the  General  Block  Exemption 

31 

 
 
Regulation.  This  declares  certain  categories  of  aid  compatible  with  the  single  market  in 
application of Articles 107 and 108 TFEU24.  

When State aid is present and it requires notification, it is the duty of the Member State to notify 
State aid measures to the Commission before granting them, in  compliance with Article 108(3) 
TFEU. In this respect, the State aid analysis carried out by Malta in the recovery and resilience 
plan  cannot  be  deemed  a  State  aid  notification.  In  as  far  as  Malta  considers  that  a  specific 
measure  contained  in  the  plan  entails  de  minimis  aid  or  aid  exempted  from  the  notification 
requirement, it is the responsibility of Malta to ensure full compliance with the applicable rules.  

4.  SUMMARY OF THE ASSESSMENT OF THE PLAN 

4.1. Comprehensive and adequately balanced response to the economic and social situation  

The  recovery  and  resilience  plan  presents  a  comprehensive  and  adequately  balanced 
response to the economic and social situation, thereby contributing to all six pillars referred 
to in Article 3 of the RRF Regulation. The plan follows a holistic approach to achieve recovery 
and  enhance  socio-economic  resilience.  Overall,  it  focuses  on  the  green-digital  twin  transition 
and on addressing Malta’s main challenges, such as the effectiveness of public administration and 
of  the  justice  system,  the  country’s  social  and  educational  needs,  the  resilience  of  the  health 
system, and improving competitiveness in key sectors. 

Table 4: Coverage of the six pillars of the RRF by the plan’s components 

Green 
transition 

Digital 
transformation 

Smart, 
sustainable 
& 
inclusive 
growth 

Social 
and 
territorial 
cohesion 

Health,  and 
economic, 
social  and 
institutional 
resilience 

the 

Policies 
for 
next 
generation 

● 

● 

Component 1 

Component 2 

Component 3 

Component 4 

Component 5 

Component 6 

● 

○ 

● 

○ 

○ 

● 

● 

● 

○ 

○ 

● 

● 

● 

○ 

● 

● 

● 

○ 

○ 

● 

24 Commission Regulation 651/2014, OJ L 187, 26.6.2014, p. 1. 

32 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Key: “●”: investments and reforms of the component significantly contribute to the pillar; “○”: 
the component partially contributes to the pillar. 

Green transition 

The  recovery  and  resilience  plan  is  expected  to  contribute  substantially  to  the  green 
transition. The green transition will be supported by various reform and investment measures to 
decarbonise  transport,  achieve  sustainable  mobility,  improve  the  energy  efficiency  of  buildings 
and  promote  renewable  energy.  The  proposed  investments  in  the  renovation  of  buildings 
(Component  1)  are  expected  to  lead  to  a  reduction  of  GHG  emissions  by  limiting  the  use  of 
electricity sourced from the national grid. This impact will be further sustained and strengthened 
by the proposed investments in the promotion of use of renewable energy technologies. These are 
complemented  by  reforms  in  the  waste  sector  to  improve  the  circular  economy  and  reduce  the 
environmental impact of waste. Component 2 promotes a modal shift from road transport to more 
sustainable transport modes and aims to decarbonise road transport through electrification in line 
with  the  current  trends  in  order  to  make  road  transport  smarter  and  more  sustainable25. 
Investments  that  contribute  to  these  objectives  include  building  a  new  ferry  landing  site  at 
Buġibba,  St  Paul’s  Bay,  supporting  the  uptake  of  electric  vehicles  in  the  private  sector  and 
replacing part of the public transport fleet. In addition, reforms are proposed to improve transport 
planning,  expand  public  transport,  promote  teleworking  in  the  public  sector  and  increase  the 
efficiency of the public sector vehicle fleet. 

Digital transformation 

The proposed reforms  and investments are expected to sustain the digital transition while 
improving  productivity,  increasing  potential  output  and  making  the  public  sector  more 
effective  and  transparent.  The  plan  proposes  an  integrated  approach  to  support  and  fast-track 
digital  transition  by  strengthening  the  national  policy  framework,  investing  in  the  further 
digitalisation  of  public  administration  and  public  services,  as  well  as  strengthening  initiatives 
related to digitalisation of the private sector. Key investments are included under Component 3, 
such  as  improving  the  government’s  digital  backbone,  digitalising  the  Merchant  Shipping 
Directorate,  digitalising  public  administration  and  its  services  further,  and  rolling  out  support 
measures  to  digitalise  the  private  sector.  In  addition,  reform  measures  that  build  on  national 
strategies under development aim to bridge and reduce the digital divide, strengthen and promote 
digital  skills  and  improve  digital  public  services.  They  also  aim  to  implement  Malta’s  Smart 
Specialisation  Strategy,  which  promotes  business  R&I  and  strengthens  public-private 
cooperation.  Investments  under  Component  4  should  speed  up  the  digital  transition  of  Malta’s 
healthcare system, improve the quality of patient care and patient experience, and reduce waiting 
times.  The  investment  in  digitalisation  under  Component  6  should  improve  how  the  justice 
system functions by implementing a number of secure digital solutions and tools to support users 

25 https://publications.jrc.ec.europa.eu/repository/handle/JRC116644.  

33 

 
 
                                                           
through  collaboration and integration, thereby  increasing accessibility to  the justice system and 
its efficiency. 

Smart,  sustainable  and  inclusive  growth,  including  economic  cohesion,  jobs,  productivity, 
competitiveness,  research,  development  and  innovation,  and  a  well-functioning  single  market 
with strong SMEs 

Investments and reforms in education and training are expected to contribute to smart and 
inclusive  growth.  The  reforms  in  education  and  training  and  to  active  labour  market  policies 
proposed under the different components will help improve the training offer and align it better 
with  labour  market  needs.  In  particular,  Component  5  includes  reforming  the  employment 
strategy,  promoting  upskilling  by  developing  a  career  and  lifelong  guidance  system  for  adult 
learners, and investments in skills for the tourism and hospitality sector, which is a key economic 
sector  in  Malta.  This  investment  focuses  on  the  training  and  upskilling  of  human  capital  to 
answer  the  future  needs  of  higher  quality,  more  sustainable  and  greener  tourism.  Ambitious 
investments and reforms for the renovation of buildings envisaged under Component 1 have the 
potential to boost job creation and support the development of green skills for the renovation and 
construction sector. Investments in innovative health services under Component 4 could have a 
spillover  effect  on  growth  and  job  creation  in  other  fields.  Support  for  the  digitalisation  of  the 
private sector under Component 3 is also likely to create job opportunities in ICT. Reform efforts 
under Component 3 are expected to promote R&I in the business sector and strengthen private-
public cooperation.  

Social and territorial cohesion 

Social cohesion will be strengthened through measures to improve access to education and 
training,  and  the  adequacy  of  social  protection  and  pension  systems.  Measures  envisaged 
under  Component  5  have  the  potential  to  increase  participation  in  education  and  training, 
including for vulnerable groups such as young people at risk of early school leaving, low-skilled 
people and those with disabilities, reducing their risk of falling into inactivity and poverty traps. 
The development of digital training offers through the e-college platform in particular will allow 
better access to training for all and reduce possible geographical barriers. The provision of new 
medical  services proposed under Component 4 aims to  improve access  to  healthcare across the 
island.  Component  5  also  includes  measures  with  the  potential  to  further  contribute  to  social 
cohesion, such as the review of the effectiveness of the unemployment benefits system in terms 
of adequacy, activation and adaptation to the economic cycle and a review of the adequacy and 
sustainability of the pension system. 

The  plan  takes  into  account  the  limited  territorial  challenges.  Given  Malta’s  size,  regional 
differences are related to the geographic split between the main island and Gozo. All measures in 
the plan benefit Gozo as well as the main island. The investments proposed under Component 5 
are  particularly  important  in  this  respect  as  they  aim  to  improve  the  quality  of  the  tourism 
industry, a key sector for the economic development of both islands.  

34 

 
 
Health,  and  economic,  social  and  institutional  resilience,  with  the  aim  of,  among  other  things, 
increasing crisis preparedness and crisis reaction capacity 

The resilience of the health sector is expected to be strengthened by a better planning of the 
health workforce and addressing the difficult situation of foreign workers in the sector. The 
first reform under Component 4 should improve workforce management and address obstacles to 
hiring and retaining foreign healthcare workers, also by improving their well-being. The reform 
contains  measures  to  help  retain  health  workers  and  address  the  persistent  issues  of  staff 
shortages  through  better  workforce  planning  and  improving  the  integration  and  well-being  of 
foreign  workers.  It  contains  measures  to  assess  the  regulatory  environment  affecting  the  hiring 
and retention of foreign health workers and provide recommendations for improvement, and later 
on  to  assess  the  progress  in  implementing  these  recommendations,  including  a  quantitative 
evaluation of the reform’s impact on workers’ well-being.  

The first investment in the component aims to establish a blood, tissue and cell centre, including 
the  design  and  construction  of  the  building  and  the  procurement  of  medical  equipment  and 
healthcare furniture. It is accompanied by a reform to address the possible regulatory barriers to 
the centre’s functioning. The capacity of the RRF will allow Malta to supply all blood needs and 
perform  interventions  related  to  bone  tissue  and  stem  cells  based  on  clinical  indications.  This 
investment  should  provide  the  health  system  with  valuable  capacity  to  improve  the  health 
outcomes  of  the  population.  The  second  investment  under  Component  4  consists  of  three 
measures:  (i) investments  in  the digital  transformation  of outpatient and operation management 
processes  to  fully  enable  effective  resource  utilisation;  (ii)  investments  to  transform  the  tissue 
analysis  workflow  and  reporting  into  a  unified  digital  platform;  (iii)  investments  to  improve 
radiotherapy delivery, allowing for a significant reduction in treatment volumes and times as well 
as  side  effects  for  patients.  The  implementation  of  these  measures  will  help  make  the  health 
system more resilient through digitalisation and new technologies. Furthermore, the measures in 
this  component  are  complemented  by  the  parallel  initiatives  financed  under  other  EU 
programmes  to  support  capacity  building  for  health  professionals  and  further  investment  in 
primary care centres. 

The institutional resilience of Malta will be addressed through reforms and investments to 
promote  the  digitalisation  of  its  public  services  under  Component  3  and  improve  its 
institutional  framework  under  Component  6.  The  investment  in  Component  3  should  help 
further  strengthen  the  digitalisation  of  public  administration  and  improve  the  delivery  of  and 
access  to  digital  public  services,  including  in  the  maritime  sector.  Investments  in  the  further 
digitalisation  of  the  justice  system  under  Component  6  should  create  better  conditions  for 
information exchange, which is instrumental in tackling the challenges in the area of justice, the 
fight  against  corruption  and  money  laundering,  and  taxation.  The  reforms  proposed  under 
Component  6  should  strengthen  different  elements  within  the  justice  system,  in  particular  the 
independence  of  the  judiciary,  the  lack  of  a  separate  prosecution  service  from  the  investigative 
branch,  as  well  as  operational  inefficiencies.  Furthermore,  Component  6  contains  reforms  to 
improve  the  capacity  to  effectively  detect  and  prosecute  corruption  and  to  fight  money 
laundering. 

35 

 
 
Component 5 aims  to improve the quality of education and training systems and increase 
participation, which is expected to strengthen economic and social resilience. A better skilled 
population should also help address high skills mismatches and labour shortages in the country. It 
will ensure access to better quality jobs and encourage more vulnerable groups to participate in 
the labour market. 

Policies for the next generation, children and youth, such as education and skills  

Future  generations  are  expected  to  benefit  from  reforms  and  investments  that  improve 
energy efficiency and promote sustainable transport (Components 1 and 2), both in terms 
of well-being and health outcomes. In addition, the provision of suitable training for green skills 
that should complement the skills strategy proposed under Component 1 will offer young people 
high-quality,  innovative  job  opportunities.  Investments  in  the  renovation  of  public  schools  will 
have a positive impact on the well-being of the children concerned. Investing in the health system 
(Component 4) is also expected to benefit future generations.  

The plan also includes reforms and investments in the areas of education and training that 
address  young  people  in  particular.  A  national  policy  on  inclusive  education  and  a  Reading 
Recovery  Programme  under  Component  5  aim  to  reduce  early  school  leaving  and  promote  the 
inclusiveness of education and training. Preventing and reducing early school leaving through a 
student  tracking  system  and  improving  the  monitoring  and  evaluation  of  the  education  system 
will contribute towards a more effective and inclusive education system. The reforms envisaged 
aim  to  equip  all  children  with  the  education  and  skills  needed  to  thrive  in  a  changing  labour 
market, taking into account their specific needs. An investment to set up a Centre for Vocational 
Education  Excellence  in  the  field  of  tourism  (ITS  Campus),  including  childcare  services,  an 
incubator, an R&D centre as well as updated training programmes, should boost the take-up of 
vocational education and training and help further reduce the high early school leaving rate. 

Conclusion on the assessment of criterion 2.1 of Annex V to the RRF Regulation 

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Malta,  its  recovery  and 
resilience plan represents to a large extent a comprehensive and adequately balanced response to 
the economic and social situation, thereby contributing appropriately to all six pillars referred to 
in Article 3 of the RRF Regulation, taking the specific challenges and the financial allocation of 
Malta into account. This would warrant a rating of A under the assessment criterion 2.1 in Annex 
V to the RRF Regulation. 

4.2. Link with country-specific recommendations and the European Semester  

The  plan  is  ambitious  in  effectively  addressing  a  significant  subset  of  the  structural 
challenges  identified  in  the  country-specific  recommendations  (CSRs)  of  2019  and  2020. 
Many of the CSRs addressed to Malta focused on long-standing structural challenges in the area 
of governance, including aggressive tax planning, money laundering and justice, which have seen 
only limited progress in the past. Good governance is one of the pillars of the government’s long-
term  economic  vision,  and  the  plan  makes  significant  efforts  to  remedy  the  challenges  in  this 
area. Investing in education also features on the list, with relevant measures proposed to address 

36 

 
 
weaknesses in the education system, also with a view to improving skills. Further reforms aim to 
address shortcomings in the long-term sustainability of public finances, resilience and provision 
of the health system, and employment. A major part of the planned investments focuses on  the 
green and digital transition, thereby addressing the CSRs on investments in these areas.  

Public finances: long-term sustainability and fiscal policy  

Measures  included  in  the  plan  relate  to  the  long-term  sustainability  concerns  for  public 
finances (CSR 1 2019). Despite starting from a low base, pension spending is projected to be one 
of the fastest growing in the EU in the long term. Under Component 5, the plan proposes carrying 
out  an  assessment  of  the  current  pension  system  to  ensure  further  adequacy,  sustainability  and 
social  solidarity.  The  government  will  publish  an  Action  Plan  outlining  policy  proposals, 
including  legislative  changes  where  relevant,  with  the  objective  to  improve  the  long-term 
sustainability and adequacy of the pensions system. However, there is no explicit commitment to 
implement such policy proposals as part of the recovery and resilience plan. Investments in the 
primary care services, which are also expected to ease the pressure caused by rising health costs 
in the long term, are primarily financed by EU programmes outside the recovery and resilience 
plan. 

Healthcare system: Resilience and provision of health  

The  resilience  of  the  health  system  (CSR  1  2020)  is  being  addressed  through  targeted 
investments  and  reforms.  The  planned  establishment  of  a  Blood,  Tissue  and  Cell  Centre  for 
Malta, which will be preceded by a review of the national legislation on the matter in line with 
relevant EU rules, is expected to make Malta self-sufficient in these innovative treatments. This 
helps  make  the  health  system  more  resilient.  Reforms  to  improve  workforce  management  and 
make it easier to hire and integrate foreign workers are also expected to strengthen the capability 
of the health system to maintain high quality and stable services.  

The investment and reforms under Component 4 are to be complemented by initiatives financed 
under other EU programmes, including those that shift mental health treatments away from long-
term  institutionalisation  and  promote  the  socio-economic  integration  of  these  patients  and 
integration of paediatric rehabilitation services. Further capacity building for health professionals, 
including  training,  mobility  and  upskilling,  will  also  be  supported  by  other  EU  funding. 
Similarly, investments in primary care will be supported outside the recovery and resilience plan. 
The  Southern  Primary  Care  Hub,  which  is  expected  to  be  finished  in  2023,  should  reduce  the 
pressure  on  the  main  Mater  Dei  Hospital.  The  longer-term  vision  is  to  decentralise  healthcare 
towards  community-based  care.  Efforts  also  continue  to  expand  the  provision  of  e-health 
infrastructure, which links sectoral systems together for the exchange of health data.  

Labour market and social policies  

The plan is expected to help address the labour market challenges identified in CSR 2 2020. 
To mitigate the negative impact of the COVID-19 crisis, Malta has rolled out several measures to 
safeguard jobs prior to the recovery and resilience plan. The Wage Supplement Scheme, which is 
similar to a short-time working scheme, has been the most important measure. Nevertheless, the 

37 

 
 
plan  does  not  envisage  anchoring  the  scheme  in  legislation.  However,  Component  5  envisages 
assessing  and  periodically  monitoring  the  adequacy  and  coverage  of  unemployment  benefits  in 
Malta to ensure effective access to them.  

Furthermore,  implementation  of  the  measures  in  the  newly  adopted  Employment  Strategy 
concerning  at  least  (i)  older  workers  (aged  55-64);  (ii)  low-skilled  adults;  and  (iii)  the  gender 
employment  gap  is  expected  to  make  the  labour  market  more  resilient.  Component  6  further 
includes  implementation  of  key  measures  in  the  Gender  Equality  and  Mainstreaming  Strategy 
Action Plan to boost gender equality in the Maltese labour market and beyond.  

Education and skills: Training outcomes, quality, access, inclusiveness 

The  plan  makes  efforts  to  improve  the  quality  and  inclusiveness  of  education  and  skills 
development  (CSR  3  2019  and  CSR  2  2020).  Several  measures  outside  of  the  plan,  such  as 
counselling,  extra-curricular  activities  and  anti-bullying  measures,  also  included  in  the  national 
strategy on early leavers from education and training, aim to address the long-standing issue of 
early  school  leaving.  Component  5  envisages  complementing  these  efforts  with  prevention  and 
intervention  measures.  These  include  the  provision  of  accredited  school-based  literacy  support 
programmes  (reading  recovery  programme)  for  the  lowest-performing  6-7-year-olds  and  the 
introduction of an early school leaving tracking system – the Data Warehouse Project – with data 
access for institutions working on policy monitoring and guidance. Component 5 further entails 
the  implementation  of  key  measures  from  the  Basic  Skills  Strategy  to  improve  the  quality  of 
skills acquisition in Malta. Providing online courses and guidance services to adults seeking the 
best educational trajectory to match their needs via a newly set-up e-college is expected to make 
it  easier  for  a  wide  audience  to  access  upskilling  and  reskilling  programmes,  including  low-
skilled adults.  

Component  3  (reform  2)  promotes  enhanced  cooperation  between  the  education  and  training 
system  and  employers.  It  also  refers  to  strategies  currently  being  defined  that  promote  the 
improvement of digital  literacy among the population  and the strengthening of the pool  of  ICT 
specialists.  The  launch  of  a  training  and  certification  programme  in  the  buildings  and 
construction  industry  will  increase  the  capacity  to  provide  training  to  professionals  at  various 
levels,  with  specific priority  given to  the  acquisition of the  skills  necessary to support building 
renovation projects. It will increase the availability of qualified staff by making an existing skill 
card  mandatory  and  by  extending  skilling  and  upskilling  measures  to  new  professional 
categories. The development of skills  will  also be supported by  a targeted investment  in  a new 
campus  for  the  Institute  for  Tourism  Studies,  one  of  two  vocational  education  and  training 
institutions  in  Malta.  It  offers  updated  training  programmes  linked  to  the  digital  and  green 
transition in  the tourism sector. On inclusiveness  of education, the plan includes the roll-out  of 
multi-sensory learning rooms for students with special needs in colleges and the setting up of two 
autism  units in  secondary  schools. This  will allow for further integration of pupils with  special 
needs into the mainstream school environment. The measure will be accompanied by continuous 
training  in  inclusive  pedagogy  for  teachers  and  learning  support  educators  as  well  as  the 
implementation of key measures from the National Inclusion Policy Strategy.  

38 

 
 
Digital transition 

The recovery and resilience plan is expected to support the digital transition (CSR 3 2020) 
both  through  investment  and  accompanying  policy  reforms.  Component  3  strives  to 
accelerate  the  digital  transformation  by  improving  the  government’s  digital  services.  This 
involves strengthening the resilience, security and efficiency of its digital backbone and investing 
in new digital solutions, devices and tools. This, together with the further improvement of public 
services  and  internal  services  within  public  administration,  is  expected  to  improve  the  user 
experience of individuals and businesses.  

Investment  in  the  health  sector  (Component  4)  is  also  expected  to  contribute  to  the  digital 
transformation. The digitalisation of outpatient facilities at the Mater Dei Hospital is expected to 
employ  machine  learning  and  artificial  intelligence  to  improve  the  effectiveness  of  resource 
utilisation, time management and interaction with patients. Moreover, the introduction of digital 
pathology  is  expected  to  transform  the  (currently  manual)  histology  workflow  and  reporting  of 
cancer cases  into an  easily accessible  advanced digital  platform, which will  allow for real-time 
tracking  of  cancer  cases.  The  plan  also  envisages  investing  in  the  digitalisation  of  the  justice 
system (Component 6) to improve workflows and the efficiency of the system. Various services 
in  courts  will  benefit  from  central  integration  elements  such  as  robotic  process  automation, 
hybrid cloud platform usage, e-ID authentication and single sign-on. 

Green transition, in particular clean and efficient production and use of energy  

Investments  and  reforms  in  resource  and  energy  efficiency  (CSR  3  2019),  the  clean  and 
efficient production and use of energy, and waste management are expected to support the 
green  transition  (CSR  3  2020).  Component  1  includes  investments  in  the  renovation  of  a 
number of public buildings, public schools and  hospitals, and support the renovation of private 
buildings.  Each renovation is expected to  reduce direct  and indirect  GHG emissions by at  least 
30%. Investments under Component 1 also cover the promotion of renewable energy generation 
and use in buildings, roads and public spaces. These investments are complemented by reforms to 
strengthen the regulatory framework in the building sector and ensure a sufficient and diversified 
pool  of  staff  with  appropriate  expertise  (by  launching  a  training  and  certification  programme). 
The  reforms  and  investments  under  Component  1  are  complemented  by  schemes  and  financial 
instruments supported by other EU funds that target residential and commercial renovations. On 
waste, Component 1 includes (i) the adoption of a construction and demolition waste strategy and 
the  implementation  of  follow-up  measures;  (ii)  the  completion  of  a  study  and  legislation  to 
extend  producer  responsibility  to  additional  waste  streams;  and  (iii)  reform  of  the  waste 
collection system by regions, including packaging waste. 

The plan includes investments and reforms in sustainable transport (CSR 3 2019 and CSR 
3 2020) aimed at reducing traffic congestion (CSR 3 2019). More specifically, the reforms are 
expected  to  improve  transport  planning  and  encourage  the  use  of  public  transport,  promote  a 
modal shift from road to ferries, encourage remote working in the public sector and increase the 
efficiency  of  public  sector  fleet  management.  Furthermore,  the  investments  will  focus  on  the 
construction of a ferry-landing site with electric charging infrastructure for vessels, incentivising 

39 

 
 
the purchase of zero-emission electric vehicles in the private sector and financing the acquisition 
of  electric  buses  for  public  transport.  These  measures  are  expected  to  reduce  congestion  and 
improve the sustainability of transport. 

The  plan  includes  certain  measures  that  are  expected  to  help  address  the  CSRs  on  R&I 
(CSR 3 2019 and 2020). Component 3 includes the finalisation and implementation of Malta’s 
Smart Specialisation Strategy, with a focus on promoting business R&I and encouraging public-
private cooperation. This measure is expected to address some important issues for encouraging 
R&I  investments,  such  as  simplifying  administrative  processes,  which  present  a  burden 
especially  for  SMEs.  Nevertheless,  the  measure  remains  rather  vague  and  lacks  more  concrete 
and  impactful  actions  (for  example,  with  regards  to  effective  public-private  cooperation,  to 
promote inter-sectoral mobility of researchers, institutionalise and incentivise academia-business 
linkages, etc.). In addition, the plan includes an investment in the Blood, Tissue and Cell Centre 
under  Component  4  which  is  expected  to  create  a  platform  for  highly  specialised  personnel  to 
develop  and  implement  innovative  tissue-related  health  services.  Furthermore,  Component  5 
proposes  an  investment  to  establish  a  Centre  for  Vocational  Education  Excellence,  which 
incorporates  an  R&D  centre.  While  the  above-mentioned  measures  will  not  by  themselves  be 
sufficient to ensure an R&I-focussed investment climate in Malta due to their relatively limited 
and targeted scope, they are expected to partially contribute to increasing R&I investments in the 
country, as called for in the CSRs.  

Justice system, prosecution service, corruption 

The plan contains important steps to strengthen judicial independence and step up the fight 
against corruption (CSR 2 2019 and CSR 4 2020). Component 6 envisages reforms within the 
justice  system  to  strengthen  its  independence.  Legal  amendments  were  introduced  in  2020  to 
change how the Chief Justice and members of the judiciary are appointed, while also altering the 
composition  of  the  Judicial  Appointments  Committee  responsible  for  appointing  judges  and 
magistrates.  This  will  ensure  that  the  majority  of  its  members  are  members  of  the  judiciary.  A 
review of the independence of specialised tribunals will be undertaken in communication with the 
Council of Europe’s Venice Commission and remedial action taken based on the outcome of the 
review.  

The plan also aims to improve the quality and efficiency of the justice system by increasing the 
number of members of the judiciary and targeted investments to digitalise the courts system. The 
latter  investment  consists  of  two  parts:  (a)  the  entry  into  force  of  legal  amendments  to  make  it 
possible for civil proceedings to be held via live video conferencing and for criminal judicial acts 
to  be  filed  electronically;  and  (b)  a  number  of  digital  solutions  for  the  justice  system.  This 
includes the mapping and redesign of processes to achieve end-to-end digital processes, project 
management,  legal  and  overall  consultancy  and  cost  benefit  analysis  support,  as  well  as  an 
integrated e-filing system  across the justice sector, the integration of a digital  case journey and 
the use of emerging technologies to, among others, ensure virtual court sittings.  

On  prosecution,  Malta  has  separated  the  dual  role  previously  held  by  the  Attorney-General  as 
both  prosecutor  and  legal  advisor  to  the  government;  the  Attorney-General  retains  the  role  of 

40 

 
 
chief prosecutor, while the State Advocate has become the State’s legal advisor. The prosecution 
of all non-summary cases (carrying a sentence of more than 2 years) is being transferred from the 
police  to  the  Office  of  the  Attorney-General.  A  review  will  be  undertaken  on  transferring  less 
serious  (summary)  cases  to  the  Attorney-General’s  office  for  prosecution.  Legislative  changes 
will be made in line with these recommendations. In addition, a number of anti-corruption bodies 
have  been  given  the  status  of  injured  party  at  law,  allowing  them  to  seek  judicial  review  of 
decisions not to prosecute by the Attorney-General in cases referred by them. An assessment will 
be carried out with the possibility to further broaden the scope for judicial review. The police will 
remain  responsible  for  investigative  work,  with  greater  transparency  introduced  on  how  the 
Police  Commissioner  is  appointed.  The  institutional  framework  capacity  to  fight  corruption  is 
expected  to  be  strengthened  through  the  implementation  of  the  National  Anti-Fraud  and 
Corruption  Strategy,  reform  of  the  Asset  Recovery  Bureau,  and  through  reforms  targeting  the 
Permanent  Commission  Against  Corruption.  This 
the 
appointment  of  the  Chairperson  and  members  of  the  Commission,  the  adoption  of  a  budgetary 
and  human  resources  plan  together  with  standard  operating  procedures  to  ensure  appropriate 
resources and better functioning of the body, and the creation of a digital registry of information 
on corruption cases held by the Permanent Commission Against Corruption.  

includes  added 

transparency 

in 

Money laundering 

The  measures  presented  in  the  plan  offer  a  strong  commitment  to  minimising  money 
laundering opportunities (CSR 2 2019 and CSR 4 2020). In 2020, the National Coordinating 
Committee  on  Combating  Money  Laundering  and  Funding  of  Terrorism  prepared  the  new 
National  Anti-Money  Laundering/Combating  Terrorist  Financing/Targeted  Financial  Sanctions 
Strategy  and  Action  Plan  for  2021-2023,  which  replaces  the  strategy  for  2017-2020. 
Implementation  of  this  action  plan  (Component  6)  is  the  cornerstone  of  Malta’s  recovery  and 
resilience plan in terms  of addressing outstanding weaknesses in the area of money laundering. 
From the seven policy goals contained in the action plan, the focus is on detecting, investigating 
and  prosecuting  money  laundering.  This  responds  to  2019  and  2020  CSRs,  which  called  for 
effective  enforcement.  Increased  powers  and  capacity  of  the  Asset  Recovery  Bureau  are  also 
expected to strengthen law enforcement in the area of money laundering and financial crime. In 
addition,  after  the  Financial  Action  Task  Force  put  Malta  under  increased  monitoring  in  June 
2021, the plan also commits to adopting necessary steps to rectify shortcomings found by the task 
force. 

Aggressive tax planning 

The  plan  includes  four  measures  under  Component  6  aimed  at  limiting  the  room  for 
aggressive tax planning practices (CSR 2 2019 and CSR 4 2020). The plan proposes limiting 
tax benefits for dividends derived from bodies resident in countries listed on the Code of Conduct 
Group  list  of  non-cooperative  jurisdictions.  While  the  measure  goes  in  the  right  direction,  its 
geographic  scope  is  limited.  The  planned  introduction  of  transfer  pricing  rules  is  expected  to 
reduce corporate profit shifting possibilities. Effectiveness of such rules will nevertheless depend 
on  their  thorough  implementation.  The  planned  study  to  formulate  policy  recommendations  on 
outbound  and  inbound  payments  of  dividends,  interest  and  royalties  and  the  subsequent 

41 

 
 
introduction  of  legislation  should  help  address  features  of  the  taxation  system  that  facilitate 
aggressive tax planning. However, the citizenship and residence schemes continue to pose a risk 
of double non-taxation for both companies and individuals. Subject to the full implementation of 
a spontaneous exchange of information relating to individuals that are granted citizenship under 
the  scheme,  this  measure  is  expected  to  partly  mitigate  the  risk  of  aggressive  tax  planning  by 
individuals. It will only apply to future applicants and not to existing applicants, which limits its 
overall effectiveness.  

Response to the current economic and social situation and impact on growth potential  

The  planned  reforms  and  investments  are  expected  to  alleviate  the  current  economic  and 
social situation in the short term and contribute to a higher growth potential in the longer 
term. Efforts  to  boost skills  and reskilling initiatives are likely to  ease labour market  pressures 
observed before the crisis. Together with inclusion policies in the education system and measures 
to further lower the high school leaving rates, they are expected to improve the socio-economic 
situation  of  low-skilled  and  disadvantaged  groups.  The  measures  adopted  as  part  of  the  green 
transition, including those focusing on energy efficiency savings in buildings and the wider use 
of  renewable  energies,  accompanied  by  policies  supporting  sustainable  mobility  and  circular 
economy, can make growth more sustainable in the long run. Investment in digitalisation aims at 
the wider use of digital solutions, thereby boosting productivity and competitiveness. Reforms in 
the area of the institutional framework should improve Malta’s attractiveness as a destination for 
international  investors, although further steps need to  be taken to  address certain  aspects  in  the 
area of money laundering identified by the Financial Action Task Force. 

Conclusion on the assessment of criterion 2.2 of Annex V to the RRF Regulation 

Taking  into  consideration  the  reforms  and  investments  envisaged  by  Malta,  its  recovery  and 
resilience  plan  is  expected  to  contribute  to  effectively  addressing  all  or  a  significant  subset  of 
challenges  identified  in  the  country-specific  recommendations  or  challenges  in  other  relevant 
documents officially adopted by the Commission under the European Semester, and the recovery 
and resilience plan represents an adequate response to the economic and social situation of Malta. 
This  would  warrant  a  rating  of  A  under  assessment  criterion  2.2  in  Annex  V  to  the  RRF 
Regulation.  

42 

 
 
Table  5:  Mapping  of  country  challenges 
recommendations and Malta’s recovery and resilience plan components 

identified 

in  2019-20  country-specific 

e
t
a
m

i
l
c

g
n
i
s
s
e
r
d
d
A

-
1
Associated  CSR 
(2019-2020) 
and 
t
n
e
European 
n
o
p
Semester 
m
recommendations C
o

2019.1.1, 

 2020.1.1 

2020.1.2 

Country challenges 

Public 
finances: 
sustainability and fiscal policy 

long-term 

Healthcare 
and provision of health 

system:  Resilience 

Labour  market 
policies 

and 

social 

2020.2.1 

Education  and  skills:  Training 
outcomes, 
access, 
inclusiveness 

quality, 

2019.3.5, 

2020.2.2 

y
g
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-
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F

-
3

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y
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t
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r
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s

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t

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t
g
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t
S

-
6

y
t
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p
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-
4

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y
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q

g
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-
5

t
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c
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t
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c
u
d
e

 ○ 

m
e
t
s
y
s
h
t
l
a
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h
e
h
t

f
o
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c
n
e
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k
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m
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f

l
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o
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t
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t
i
t
s
n
i

● 

● 

● 

Digital transition 

2020.3.4 

● 

● 

Green  transition,  in  particular 
clean  and  efficient  production 
and use of energy 

2019.3.3 

2020.3.4 

Sustainable 
congestions 

transport 

and 

2019.3.4, 

Natural  resources  and  waste 
management 

Research and Innovation 

public 
Front-load 
investment  projects;  promote 

mature 

2020.3.5 

2019.3.2, 

2020.3.6 

2019.3.1, 

2020.3.7 

2020.3.2, 

2020.3.3 

43 

● 

● 

● 

○ 

● 

● 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
private investment 

Justice 
system, 
service, corruption 

prosecution 

Money laundering 

Aggressive tax planning 

2019.2.2,  

2019.2.4, 

2020.4.1 

2019.2.3, 

2020.4.2 

2019.2.1, 

2020.4.3 

● 

● 

○ 

Key: ‘●’: investments and reforms of the component significantly address the challenge; ‘○’: the 
component partially addresses the challenge.  

4.3. Growth potential, job creation, economic, institutional and social resilience, European 
Pillar  of  Social  Rights,  mitigating  the  impact  of  the  crisis,  and  social  and  territorial 
cohesion and convergence  

The plan aims to accelerate Malta’s economic recovery and improve its growth prospects 
through  investments  and  reforms.  The  plan’s  main  objectives  are  to  improve  Malta’s 
economic,  social  and  institutional  resilience,  which  should  ultimately  reduce  the  country’s 
vulnerability to shocks. It also aims to contribute to implementing the European Pillar of Social 
Rights, including by promoting policies for children and youth, and to mitigate the economic and 
social  impact  of  the  COVID-19  crisis.  All  this  will  support  economic,  social  and  territorial 
cohesion and convergence within the EU. 

Fostering economic growth and jobs 

The  plan  contains  investments  and  reforms  to  support  economic  growth  and  jobs  in  the 
short  and  long  term.  The  investments  are  expected  to  provide  a  short-term  demand  boost, 
thereby  contributing  to  the  economy’s  recovery  in  the  short  to  medium  term.  A  stronger 
institutional framework, education system reforms and digitalisation efforts are expected to boost 
growth  potential  in  the  long  term.  Further  benefits  for  growth  and  jobs  are  expected  from  the 
investments and reforms to boost energy efficiency, decarbonise transport and improve the health 
system.  The  plan’s  measures  are  also  in  line  with  the  EU  update  of  the  2020  New  Industrial 
Strategy26. 

26 See European Commission Updating the 2020 New Industrial Strategy, COM(2021) 350 final, 5.5.2021. 

44 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Long-standing  weaknesses  in  the  institutional  framework  are  being  addressed.  This  is 
expected  to  improve  the  business  environment  and  boost  the  country’s  capacity  to  attract 
investment. Component 6 includes crucial reforms to strengthen the judiciary’s independence, to 
address  in  part  those  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. 
This  will  increase  transparency,  raise  trust  in  institutions  and  promote  good  governance.  The 
improved business environment will provide a solid foundation for investment and productivity 
growth.  

Greater  digitalisation  aims  to  facilitate  the  digital  transition  of  Malta’s  economy. 
Components 3 and 6 aim to improve the effectiveness and efficiency of public administration and 
the justice system by providing digital solutions for public services, benefitting both individuals 
and businesses. This is to be achieved by developing public services that combine a whole set of 
characteristics,  such  as  being:  (i)  digital,  cross-border  and  interoperable;  (ii)  user-centric, 
inclusive  and  accessible;  (iii)  open  and  transparent;  (iv)  trustworthy  and  secure;  and  (v)  in  line 
with  the once-only principle. The measures  are expected to  generate some spillover benefits  to 
the  private  sector,  both  by  leading  by  example  and  by  improving  access  to,  and  efficiency  of, 
services  provided  by  government  to  businesses.  They  aim  to  reduce  barriers  to  doing  business, 
thereby  improving  productivity  and  competitiveness  across  sectors.  Component  3  also  includes 
measures to support the digitalisation of companies, which is expected to make businesses more 
competitive and promote job creation, especially of high-skilled jobs.  

Improving  skills  and  bridging  the  gap  between  education  provision  and  labour  market 
needs is expected to address bottlenecks to growth. Component 5 aims to encourage students 
to continue pursuing education beyond compulsory education through better vocational education 
and  training,  with  one  objective  being  to  reduce  Malta’s  early  school  leaving  rate.  The 
development of a revised Employment Strategy aims to address issues raised by the COVID-19 
crisis and address structural challenges, including skill mismatches, and adapt to new trends such 
as  increased  automation.  The  strategy  will  focus  on  modern  and  effective  active  labour  market 
policies that equip workers with the right skills, support their employability and provide the right 
incentives  to  work.  Overall,  the  reforms  aim  to  improve  skills,  providing  a  bridge  towards  the 
education and training of adults to ensure that the skills of the workforce are up to date. This is 
expected to  address  skills  shortages and boost job  creation.  Promoting upskilling and reskilling 
opportunities  is  particularly  important  for  SMEs,  where  skills  mismatches  and  shortages  create 
significant  bottlenecks,  while  participation  in  training  remains  low.  The  benefits  from  these 
measures are likely to be long-term and long-lasting.  

Further benefits for growth and jobs are expected from investments and reforms to boost 
energy efficiency, decarbonise transport and improve the health system. The  renovation of 
private  sector  and  public  buildings  and  the  measures  taken  for  the  development  of  a  long-term 
renovation  strategy  (Component  1)  will  increase  opportunities  for  a  qualified  and  specialised 
workforce  and  reduce  costs  from  energy  consumption.  Efforts  to  decarbonise  transport 
(Component 2) will shorten travel-to-work time, reduce noise pollution and improve air quality, 
resulting in a positive impact on the quality of life and health of the workforce. Strengthening the 
resilience of the healthcare system (Component 4) would lead to better health outcomes, thereby 

45 

 
 
raising  productivity,  and  to  greater  activity  of  people  in  the  labour  market  and  longer  working 
lives.  

The plan’s assessment of the impact on growth and jobs is broadly in line with Commission 
simulations.  Compared  with  a  scenario  without  the  RRF,  Malta  estimates  that  RRF-financed 
investments, and the reforms accompanying them, will contribute to a 0.5% increase in GDP after 
2 years, a 0.6% increase after 5 years, a 0.5% increase after 10 years, and a 0.2% increase after 20 
to  create  short-term  employment 
years.  The  proposed  reforms  and 
opportunities, particularly at low and medium skill levels. However, these effects are seen to be 
temporary. In contrast, the impact on wages is more permanent and is consistent with continuing 
productivity gains.  

investments 

tend 

All investments in the plan financed through the RRF are expected to be additional to the 
baseline without the RRF. Over 2020-2026,  growth-enhancing  government expenditure in  the 
policy areas27 covered by expenditure financed through RRF grants  be almost 50% higher than 
in the reference period 2017-2019. 

Box 2: Stylised NGEU impact simulations with QUEST – Malta 

27  The  policy  areas  are  defined  according  to  the  classification  of  the  functions  of  government  COFOG 
(https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Government_expenditure_by_function_%E2%80%93_COFOG). 

46 

 
 
                                                           
Model simulations conducted by the Commission using the QUEST model show that the 
economic  impact  of  the  NGEU  in  Malta  could  lead  to  an  increase  in  GDP  of  between 
0.7% and 1.1% by 202628. After 20 years, GDP could be 0.2% higher. Spillover benefits 
account for a large part of such Impacts. 

According  to  these  simulations,  this  would  translate  into  up  to  1,200  additional  jobs.  Cross-
border  (GDP)  spillovers  account  for  0.6  pps  in  2021  and  2022,  showing  the  value  added  of 
synchronised  expenditure  across  Member  States  (line  2).  Even  in  a  scenario  with  a  lower 
productivity of NGEU funds, it would still lead to a significant impact (line 3)29. 

QUEST simulation results (% deviation of real GDP level from non-NGEU case) 

Scenario 

2021  2022  2023 

2024 

2025 

2026 

2027 

2028  2029 

2030 

2040 

Baseline 

0.9 

1.1 

1.0 

1.0 

1.1 

1.1 

0.8 

0.5 

0.5 

0.4 

0.2 

   of which spillover 

0.6 

0.6 

0.5 

0.5 

0.5 

0.4 

0.3 

0.2 

0.1 

0.1 

0.0 

Low productivity 

0.5 

0.7 

0.7 

0.7 

0.7 

0.7 

0.4 

0.2 

0.2 

0.1 

0.1 

This stylised scenario does not include the possible positive impact of structural reforms, 
which  can  be  substantial.  A  model-based  benchmarking  exercise  shows  that  undertaking 
structural  reforms  that  would  result  in  halving  the  gap  vis-à-vis  best  performers  in  terms  of 
indicators of structural reforms could raise Malta’s GDP by up to 17% in 20 years, more than 
the EU average30. 

Given the differences in assumptions and methodology, the results of this stylised assessment 
cannot be directly compared with the numbers reported in Chapter 4 of Malta’s recovery 
and resilience plan. 

Strengthening social cohesion 

The plan contains  reforms and investments to improve  the inclusiveness  of education and 
access to training, and update the social security system. The reform initiatives (Component 

28 RRF amounts to roughly 90% of NGEU, which also includes ReactEU, Horizon Europe, InvestEU, Just Transition 
Fund, Rural Development and RescEU. 
29 Technically, the low productivity scenario considers a significantly reduced output elasticity of public capital. 
30  Varga,  J,  in  't  Veld  J.  (2014),  The  potential  growth  impact  of  structural  reforms  in  the  EU:  a  benchmarking 
exercise, European Economy Economic Papers no. 541.  
http://ec.europa.eu/economy_finance/publications/economic_paper/2014/pdf/ecp541_en.pdf.  

47 

 
 
                                                           
 
  
5) on literacy, accessibility of education and inclusive policy are expected to contribute to better 
access  to  education  and  to  tackling  the  challenge  of  early  school  leaving.  This  is  in  line  with 
Principle  1  of  the  European  Pillar  of  Social  Rights  with  respect  to  quality  and  inclusive 
education, training and lifelong learning. Malta also proposes reforms and investments in the area 
of skills. There will be a specific focus on offering training to low-skilled adults, including early 
school  leavers,  by  setting  up  an  e-college  and  establishing  a  new  Centre  for  Vocational 
Excellence  for  the  tourism  and  hospitality  sector.  Together,  these  measures  are  expected  to 
contribute  to  providing  the  Maltese  population,  in  particular  the  most  vulnerable,  with  better 
skills  and  new  opportunities,  and  improve  their  employability.  Better  educational  and  labour 
market  outcomes  will  help  mitigate  pre-existing  risks  of  poverty  and  social  exclusion. 
Component 5 also includes measures aimed at reviewing the effectiveness of the unemployment 
benefits system in terms of adequacy, coverage, activation and adaptation to the economic cycle, 
and  at  improving  the  adequacy  and  sustainability  of  the  pensions  system,  with  a  potential  to 
further contribute to social cohesion.  

Investment  and  reforms  in  digital  and  health  technologies  are  expected  to  broaden  the 
accessibility of public services. The improvement and increased accessibility of public services 
thanks  to  new  technologies  (Component  3)  has  the  potential  to  ensure  broader  access  for  all, 
including  for  those  who  are  more  difficult  to  reach.  This  measure  is  expected  to  mitigate  the 
emergence of new divides in society. The digitalisation of health services and the establishment 
of  a  Blood,  Tissue  and  Cell  Centre  are  also  expected  to  improve  accessibility,  in  line  with 
Principle 16 (access to healthcare) of the European Pillar of Social Rights. The component also 
pays special attention to the integration and well-being of foreign workers.  

Reducing vulnerability and increasing resilience 

Greater  trust  and  transparency  in  the  institutional  framework  are  important  steps  for 
increasing  the  resilience  of  Malta’s  society  and  economy.  The  implementation  of  measures 
under Component 6 is expected to help raise domestic and external trust in Maltese institutions. 
The  digitalisation  of  public  administration  (Component  3)  and  law  courts  will  further  increase 
transparency  and  ensure  high-quality  services  to  citizens.  These  measures  are  expected  to 
improve  government  effectiveness  and  efficiency  in  designing  timely  and  appropriate  policy 
answers to economic shocks. These are major factors underpinning society’s and the economy’s 
capacity to adjust and react to external shocks.  

Measures in the areas of education, skills and employment are expected to improve how the 
labour  market  functions  and  to  limit  ongoing  damages  in  the  case  of  economic  shocks. 
Several measures in Component 5 aim to improve skills, strengthen active labour market policies 
and bridge the gap between education provision and labour market needs. The review and regular 
monitoring  of  the  effectiveness  of  unemployment  benefits  aims  at  increasing  the  adequacy  of 
benefits  whilst  boosting  the  incentive  to  work.  Overall,  the  measures  are  expected  to  help  the 
labour  market  adjust  more  rapidly  to  needs  arising  from  technological  progress  and  sudden 
changes in the external environment, thereby reducing the possibility of continuing increases in 
unemployment, inactivity and social exclusion. 

48 

 
 
The  resilience  of  the  health  system  is  expected  to  improve.  Component  4  will  contribute  to 
retaining  health  workers  and  addressing  continuing  staff  shortages  through  better  workforce 
planning  and  improving  the  integration  and  well-being  of  foreign  workers.  Investing  in  the 
Blood, Tissue and Cell Centre is expected to enable the national health system to provide services 
for  which  patients  previously  had  to  travel  abroad.  This  reduces  Malta’s  reliance  on  other 
countries for these critical essential services, especially in the event of an economic shock.  

Measures  to  promote  better  employability,  better  health  and  longer  working  lives  should 
contribute  to  reducing  future  pressure  on  the  social  security  system  and  on  the 
sustainability  of  public  finances,  thereby  reducing  the  economy’s  vulnerability  to  future 
shocks. Policies and investments under Component 4 should contribute to better health outcomes 
for  the  population,  increasing  participation  in  the  labour  market  and  increasing  productivity, 
while  maintaining  future  social  protection  expenditure.  Under  Component  5,  the  measures  that 
promote reskilling should help raise wages while reducing pressure on the social security system. 
The  regular  analysis  and  monitoring  of  the  pension  and  unemployment  benefits  systems  is 
expected to further contribute to the sustainability of public finances.  

Cohesion and convergence  

The recovery and resilience plan takes into account the limited territorial challenges. Given 
Malta’s size, regional differences only relate to the geographic split between the main island and 
Gozo. All measures in the plan benefit both Gozo and the main island. The investment proposed 
under Component 5 is particularly important in this respect, as it targets improving the quality of 
the tourism industry, which is a key sector for the economic development of both islands.  

Conclusion on the assessment of criterion 2.3 of Annex V to the RRF Regulation 

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Malta,  its  recovery  and 
resilience  plan  is  expected  to  have  a  high  impact  on  strengthening  the  growth  potential,  job 
creation, and economic, social and institutional resilience, on contributing to the implementation 
of the European Pillar of Social Rights, including through the promotion of policies for children 
and  youth,  and  on  mitigating  the  economic  and  social  impact  of  the  COVID-19  crisis,  thereby 
enhancing the economic, social and territorial cohesion and convergence within the Union. This 
would  warrant  a  rating  of  A  under  the  assessment  criterion  2.3  of  Annex  V  to  the  RRF 
Regulation. 

49 

 
 
 
 
Box 3: Employment and social challenges identified in the Social Scoreboard accompanying 
the European Pillar of Social Rights 

The Social Scoreboard supporting the European Pillar of Social Rights sets out a number of 
employment and social challenges for Malta. Malta benefited from a dynamic labour market prior 
to the crisis with low levels of unemployment, including for  young people, and one of the highest 
employment growth rates in the EU. Amidst the adverse conditions of 2020, Malta improved upon 
an already high employment rate compared with the EU average and managed to limit the rise in 
unemployment.  Malta’s  population  enjoys  generally  good  health  and  one  of  the  longest  life 
expectancies in the EU. Unmet needs for medical care are low, with little variation between income 
groups. 

The early school leaving rate remains very high in 
Malta.  Although  decreasing,  the  rate  (at  16.7%) 
remains one of the highest in the EU (9.9%), feeding 
an  already  high  share  of  low-skilled  adults,  with  a 
further 
learning. 
Moreover,  the  prevalence  of  underachievement  and 
low  education  levels  significantly  increases  the  risk 
of  poverty  and  social  exclusion  and  feeds  already 
high labour and skills shortages. 

limited  participation 

in  adult 

The gender employment gap in Malta (17.7 pps in 
2020)  remains  one  of  the  highest  in  the  EU.  In 
recent  years,  provision  of  free  childcare  and  a 
‘making  work  pay’  strategy  have  contributed  to  an 
important  rise  in  the  employment  rate  of  young 
female 
labour  market 
women.  However, 
participation  still 
the  age  of  40, 
falls  after 
maintaining  a  high  overall  gender  employment  gap 
despite  a  major  reduction  in  the  last  decade  (from 
31.4 pps in 2012). 

After years of decline, poverty started to increase 
in  2019.  In  2019,  the  ‘at  risk  of  poverty  or  social 
exclusion’  rate  (20.1%)  was  still  slightly  below  the 
EU  average  (20.9%)  but  increasing  after  years  of 
decline.  The  impact  of  social  transfers  (other  than 
pensions)  on  poverty  reduction,  at  26.3%, 
is 
substantially lower than the EU average (32.4%) and 
declined further in 2019. 

The recovery and resilience plan submitted by Malta aims to address some employment and 
social challenges relevant for the implementation of the  Pillar. To support equal  opportunities 

50 

 
 
and access to the labour market, the plan envisages targeted reforms to: promote skills development; 
address  early  school  leaving  and  improve  inclusiveness  of  education  through  setting  up  an  ‘e-
college’;  strengthening  an  existing  literacy  programme;  and  setting  up  special  classrooms  for 
students  with  disabilities.  A  revised  employment  strategy  aims  to  support  the  employability  and 
mobility of workers, and promote further participation of older workers and low skilled adults. The 
plan also  aims to  boost  gender equality through  the  Gender  Equality  and Mainstreaming Strategy 
Action Plan. In the area of social protection and inclusion, Malta plans to review its unemployment 
benefits system to make it more responsive to the economic cycle and to review the sustainability of 
the pension system, including through consultations, studies and possible recommendations. 

Complementing  the  recovery  and  resilience  plan’s  effort  on  skills  and  education,  Malta 
pursues  its  reform  of  secondary  education.  Originally  supported  by  the  European  Social  Fund 
and  then  through  the  national  budget,  the  reform  My  Journey:  Achieving  through  different  paths 
introduces  vocational  and  applied  subjects  in  general  secondary  education  alongside  the  core 
curriculum. The aim is to better cater to different educational needs, tackle drop-out rates, and focus 
on improving employability already at an early stage. The reform started to be implemented in the 
academic year 2019-20. 

4.4. The principle of ‘do no significant harm’ (DNSH) 

Malta’s  recovery  and  resilience  plan  assesses  compliance  with  the  DNSH  principle.  The 
assessment  follows  the  methodology  set  out  in  the  Commission’s  technical  guidance  on  the 
application of ‘do no significant harm’ under the RRF Regulation (2021/C 58/01). It covers the 
six  environmental  objectives  set  out  in  Article  17  of  Regulation  (EU)  No  2020/852:  climate 
change mitigation; climate change adaptation; sustainable use and protection of water and marine 
resources; circular economy; pollution prevention and control; and protection and restoration of 
biodiversity  and  ecosystems.  The  environmental  impact  is  assessed  per  reform  or  investment. 
Hence, the 30 reforms and 17 investments in Malta’s recovery and resilience plan translate into 
47 ‘do no significant harm’ assessments.  

Each ‘do no significant harm’ assessment follows a two-step approach. The first step assesses 
whether  there  is  a  risk  that  a  measure  could  do  significant  harm  to  one  or  more  of  the 
environmental  objectives.  In  some  cases,  the  assessment  concludes  that  there  is  no  risk  of 
significant  harm,  in  which  case  the  measure  is  assessed  as  compliant  with  this  objective  of  the 
RRF  Regulation.  In  cases  where  the  analysis  identifies  a  risk,  a  more  detailed  assessment  is 
performed  in  which  Malta  demonstrates  the  absence  of  significant  harm,  including  through 
mitigating measures. 

Where needed, the requirements of the DNSH assessment are addressed in the design of a 
measure and specified in a milestone or target related to this measure. This ensures that the 
fulfilment  of  the  respective  milestones  and  targets  can  only  be  positively  assessed  once 
compliance  with  the  DNSH  principle  is  ensured.  For  instance,  measure  C3-I4  –  Rolling  out 
measures  to  intensify  the  digitalisation  of  the  private  sector  under  Component  3  includes  a 
horizontal  scheme  to  promote  the  digitalisation  of  companies.  To  ensure  that  only  activities 

51 

 
 
complying with the DNSH principle receive funding, Malta is required to include in the call for 
projects  a  list  that  excludes  certain  activities  from  being  eligible.  The  verification  of  an 
investment’s DNSH compliance is made binding through a milestone. 

A significant share of Malta’s plan is allocated to the purchase of vehicles in the private and 
public  sector.  Three  investments  under  Component  2  financially  support  a  scrappage  scheme, 
new vehicles for the public sector, and new buses for public transport. In line with example 5 of 
the  DNSH  Technical  Guidance,  it  is  set  down  in  the  design  of  the  measures  that  only  zero-
emission vehicles and buses are eligible for support. This mitigating measure avoids significant 
harm to the objectives addressing climate change mitigation and pollution prevention and control. 

Malta’s  recovery  and  resilience  plan  puts  a  particular  focus  on  energy-efficiency 
renovations and construction activities. Three investments under Component 1 include energy-
efficiency  renovations.  While  these  interventions  reduce  emissions,  they  normally  create 
significant  amounts of construction and demolition waste. Malta ensures  no significant harm in 
particular  to  the  circular  economy  objective  for  these  investments  by  detailing  in  the  plan,  for 
each  of  the  measures,  that  at  least  70%  (by  weight)  of  the  non-hazardous  construction  and 
demolition  waste  generated  on  the  construction  sites  is  to  be  prepared  for  reuse,  recycling  and 
other material recovery, as required by EU waste legislation. 

Another focus area in Malta’s recovery and resilience plan is digitalisation (Component 3). 
Particularly  relevant  from  an  environmental  perspective  is  IT  equipment,  whose  operation  may 
cause  significant  greenhouse  gas  emissions.  Significant  harm  to  the  climate  change  mitigation 
objective is avoided in Malta’s recovery and resilience plan through a commitment to the use of 
the best available IT infrastructure. To this end, Malta has confirmed that it will comply with the 
Ecodesign  Directive  for  ICT  equipment  and  that  data  centres  will  implement  the  relevant 
practices listed as ‘expected practices’ in the European Code of Conduct on Data Centre Energy 
Efficiency.  

The plan also includes a number of institutional and regulatory reforms (Component 6) and 
measures related to waste management (Component 1), education and skills (Component 5) 
and  health  (Component  4).  The  DNSH  assessment  has  confirmed  that  they  have  no  negative 
environmental  impact,  ensuring  they  do  no  significant  harm  to  any  of  the  six  environmental 
objectives. 

Particular  attention  has  been  paid  to  measures  whose  potential  impact  on  environmental 
objectives  warrants  close  scrutiny.  Component  2  includes  the  construction  of  a  new  ferry 
landing  site.  The  investment  is  set  to  shift  transport  from  road  to  sea,  thereby  encouraging 
multimodality with cleaner transport modes and addressing traffic congestion. However, for now, 
it cannot be ensured that only zero-emission ferries use the infrastructure. Therefore, in line with 
the DNSH Technical Guidance, Malta will — as a flanking measure — install electric charging 
infrastructure  for  vessels.  The  feeder  pillars  for  electric  vessels  are  expected  to  avoid  harmful 
lock-in  effects  and  pave  the  way  for  the  decarbonisation  of  ferry  transport  in  Malta.  The 
installation of the charging infrastructure is required by a milestone, ensuring that no significant 
harm to the climate change mitigation and pollution prevention objectives is to be expected. The 
project will also assess non-hazardous construction and demolition waste to ensure it is prepared 

52 

 
 
for  reuse  or  recycling  where  feasible.  Moreover,  Malta  has  given  a  binding  commitment  to 
implement  any  requirements  from  the  environmental  impact  assessments  and  other  appropriate 
assessments needed for the measure. Additional safeguards have also been taken for the planned 
adoption  of  the  Construction  and  Demolition  Waste  Strategy  and  for  one  of  the  implementing 
measures related to the restoration of exhausted quarries. The risk of significant harm is avoided 
by setting down in milestones that no activity is to lead to a significant increase of waste disposal 
or to disincentives to preparing for reuse or recycling. In addition, the waste used for backfilling 
must be: (1) suitable non-hazardous waste substituting non-waste materials; and (2) limited to the 
amount strictly necessary, in line with Article 3(17a) of Directive 2008/98/EC on waste. 

Conclusion on the assessment of criterion 2.4 of Annex V to the RRF Regulation 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  no  measure  for  the 
implementation of reforms and investments projects included in Malta’s recovery and  resilience 
plan  is  expected  to  do  a  significant  harm  to  environmental  objectives  within  the  meaning  of 
Article  17  of  Regulation  (EU)  No  2020/852  (the  principle  of  ‘do  no  significant  harm’).  This 
would  warrant  a  rating  of  A  under  the  assessment  criterion  2.4  of  Annex  V  to  the  RRF 
Regulation. 

4.5. Green transition  

Climate target 

Measures  supporting  climate  change  objectives  in  Malta’s  recovery  and  resilience  plan 
account for EUR 170.1 million, which  represents 53.8% of the plan’s total  allocation31. Of 
the six components in the plan, two include expenditure that contributes to the climate objectives.  

Malta’s recovery and resilience plan correctly follows the methodology for climate tracking 
set out in Annex VI to the RRF Regulation. For each measure, the plan identifies intervention 
fields and corresponding coefficients for the calculation of support to the climate objectives. The 
following should be noted: 

  The  proposed  reform  measures  for  the  climate  contribution  do  not  have  any  associated 
cost  in  the  recovery  and  resilience  plan.  In  this  context,  the  plan  does  not  identify 
intervention fields for these measures, and they do not contribute to reaching the climate 
target. 

  Some measures of the recovery and resilience plan consist of several sub-measures. For 
these  measures,  the  plan  indicates  an  intervention  field  for  each  sub-measure  and 
computes the climate contribution at sub-measure level.  

31 Table 8 in the Annex presents the detailed application of the climate tracking methodology for all measures and 

sub-measures with a climate contribution. 

53 

 
 
 
                                                           
  Where  relevant,  milestones  and  targets  include  specifications  that  ensure  that  the 
requirements of an intervention field are met (for instance, where intervention field 025ter 
– Construction of new energy-efficient buildings is used, a milestone/target specifies that 
the buildings need to have a primary energy demand at least 20% lower than the NZEB 
requirement (nearly zero-energy building, national directives). 

  The choice of intervention fields for the climate transition is well justified and reflects the 

nature, focus, objective or expected outcome of the investments.  

  The recovery and resilience plan does not propose to increase the climate coefficients for 

any measure. 

Table 6: Climate contribution and cost per component 

Component 

C1  Addressing  climate  neutrality  through 
enhanced  energy  efficiency,  clean  energy 
and a circular economy 
C2  Addressing  carbon  neutrality  by 
decarbonising transport 
C3  Fostering  a  digital,  smart  and  resilient 
economy 
C4  Strengthening  the  resilience  of  the 
health system 
C5  Enhancing  quality  education  and 
fostering socio-economic sustainability 
C6 
framework 
Overall contribution 

Strengthening 

institutional 

the 

Cost 

(EUR million) 

Climate 
contribution 
(EUR million) 

Climate 
contribution 
(percentage  of 
plan’s 
total 
allocation) 

77.9 

69.3 

21.9% 

110.4 

100.9 

31.8% 

55.3 

49.9 

41.4 

10 

- 

- 

- 

- 

- 

- 

- 

- 

170.1 

53.8% 

Note: the plan’s total allocation is EUR 316,403,496. This corresponds to the financial allocation after deduction of 
Malta’s proportional share of the expenses of Article 6(2) of Regulation (EU) 2021/241, calculated in accordance 
with the methodology of Article 11 of that Regulation. The amount of the estimated total costs of the recovery and 
resilience plan is higher than the plan’s total allocation. 

Sustainable  transport  measures  provide  the  largest  contribution  to  climate  objectives. 
Component  2  is  expected  to  contribute  to  reducing  greenhouse  gas  and  air  pollutant  emissions 
from  transport  across  all  transport  modes.  This  results  in  a  climate  contribution  of 
EUR 100.9 million, more than half of the plan’s total climate contribution. The construction of a 
ferry landing site at Buġibba, St Paul’s Bay is expected to help shift transport from road to sea, 

54 

 
 
 
 
 
thereby  addressing both  road congestion and air and noise pollution in the Valletta region.  The 
ferry  landing  site  is  to  be  equipped  with  electric  charging  infrastructure  to  enable  the 
electrification of ferry transport and the use of zero-emission vessels, in line with the ‘recharge 
and  refuel’  flagship  initiative.  In  addition,  a  financial  support  scheme  is  set  to  promote  the 
purchase  of  zero-emission  electric  vehicles  in  the  private  sector.  Similarly,  another  investment 
will support the purchase of zero-emission electric vehicles in the public sector. Furthermore, one 
investment aims to decarbonise the public transport fleet through the purchase of zero-emission 
electric  buses.  Notably,  these  investments  are  underpinned  by  important  reforms.  For  instance, 
the roll-out of free public transport to additional groups will incentivise the use of collective road 
transport.  Similarly,  the  implementation  of  solutions  set  out  in  the  Sustainable  Urban  Mobility 
Plan  for  the  Valletta  region,  the  creation  of  regeneration  areas,  and  an  awareness-raising 
campaign  are  all  expected  to  make  transport  more  sustainable.  These  measures  constitute  a 
comprehensive  response  to  support  the  reduction  of  harmful  emissions  from  fossil  fuels  in  the 
transport sector.  

Energy-efficiency interventions account for a large part of the climate contribution.  These 
are achieved mainly through renovation of existing public and private buildings  and, to a lesser 
extent, the construction of new energy-efficient buildings under Component 1. Measures or sub-
measures  tagged  with  corresponding  intervention  fields  contribute  EUR 64.3 million  to  climate 
objectives. This corresponds to around one third of the plan’s total climate contribution.  In line 
with the ‘renovate’ flagship initiative, the energy-efficiency interventions target the greening and 
retrofitting  of  buildings  in  both  the  private  and  public  sector,  such  as  hospitals  and  public 
schools.  In  addition,  the  construction  of  a  near  carbon-neutral  school  is  a  pilot  project  that  is 
expected to serve as a model for the future and provide a future-proof learning environment for 
students. Malta ensures through a milestone or target that the required level of energy efficiency 
will  be  achieved.  It  has  also  been  ensured  that  the  financing  allocated  to  these  measures  is 
sufficient for achieving the required energy savings. However, additional public funding will be 
needed to deliver on the energy saving objectives of the national energy and climate plan 2030, 
notably for energy renovations in private households. 

Renewable  energy  investments  promote  decarbonisation  efforts  in  Malta  and  contribute 
EUR 5 million to the climate target. Component 1 includes investments in rooftop photovoltaic 
systems  in  buildings,  roads,  footpaths,  and  other  public  spaces,  supporting  the  ‘power  up’ 
flagship initiative. Such photovoltaic systems are intended to be used to feed renewable energy 
for  street  lighting  and  pedestrian  crossings,  charging  points  for  electric  cars  and  e-bikes,  USB 
charging points, security cameras, Wi-Fi hotspots and other road technologies. These investments 
will  serve  as  a  model  to  increase  environmental  awareness  and  ensure  a  high  visibility  of 
renewable energy investments.  

Green transition 

The  measures  in  Malta’s  recovery  and  resilience  plan  are  expected  to  contribute  to  the 
green transition and environmental protection. The plan supports Malta’s decarbonisation and 
energy  transition  objectives,  as  set  out  in  the  NECP.  In  this,  Malta  commits  to  reducing 
greenhouse  gas  emissions  (-19%  in  non-ETS  sectors  compared  with  2005),  increasing  energy 

55 

 
 
efficiency  (reducing  primary  energy  intensity  to  0.07  toe/€),  and  increasing  renewable  energy 
(reaching  11.5%  renewables  in  gross  final  energy  consumption).  High-level  NECP  objectives 
also include ensuring continued diversification of energy sources, increasing the flexibility of the 
energy system, addressing energy poverty, and implementing a national strategy for research & 
innovation  in  energy  and  water.  The  NECP  ensures  coherence  between  the  energy  and  climate 
domains,  as  well  as  the  interconnection  with  the green and  energy  transition dimensions of the 
investments  envisaged  in  the  recovery  and  resilience  plan.  Importantly,  the  plan  also  helps  to 
make the climate transition fair (for example, through the roll-out of free public transport). It also 
supports  Malta  in  meeting  the  national  energy  and  climate  targets  set  out  in  the  2030  national 
energy and climate plan  and in achieving climate neutrality by 2050. Transport investments will 
help decarbonise one of Malta’s most-contributing sectors by replacing fossil fuel cars with either 
clean vehicles or alternative transport modes. Renovations of buildings will reduce the use of fuel 
oil and wasted electricity.  

While  the  plan  contains  no  measures  having  biodiversity  as  their  objective,  some  of  the 
measures may indirectly benefit biodiversity. For example, measures supporting reductions in 
pollution emissions from building renovations, the decarbonisation of transport, and the planned 
strengthening  of  waste  management  are  expected  to  be  beneficial  for  biodiversity.  Also,  Malta 
has  carried  out  a  systematic  do-no-significant-harm  assessment  indicating  that  none  of  the 
proposed measures  generates harm to  biodiversity.  Taking into  account that pollution is  one of 
the direct drivers of biodiversity loss, the energy efficiency renovations under Component 1 and 
the measures to decarbonise transport under Component 2 are expected to contribute to reducing 
greenhouse  gas  and  pollutant  emissions.  By  reducing  emissions,  the  plan  aims  to  reduce  the 
negative  impact  on  biodiversity.  This  stance  is  also  in  line  with  the  EU  Action  Plan:  Towards 
Zero  Pollution  for  Air,  Water  and  Soil.  Furthermore,  Component  1  includes  measures  on 
municipal  waste,  construction  and  demolition  waste  (such  as  the draft  construction  and 
demolition  waste  strategy  for  Malta),  single-use  plastics  and  extended  producers  responsibility. 
The  enhancement  of  the  waste  policy  framework  is  expected  to  improve  waste  prevention, 
separate  waste  collection,  and  waste  treatment  in  line  with  the  waste  hierarchy,  thereby 
contributing  positively  to  biodiversity  protection  on  the  islands.  The  plan  does  not  include 
measures  addressing  adaptation  to  the impacts  of climate change, though  its major investments 
are climate-proofed to deal with issues such as sea-level rises. 

Conclusion on the assessment of criterion 2.5 of Annex V to the RRF Regulation 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  recovery  and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  green 
transition or to address the challenges resulting from it and ensures that at least 37% of its total 
allocation contribute to the climate target. This would warrant a rating of A under criterion 2.5 of 
Annex V to the RRF Regulation. 

56 

 
 
4.6. Digital transition 

Digital tagging 

Measures supporting digital objectives in Malta’s recovery and resilience plan account for 
EUR 80.8 million,  which  represents  25.5%  of  the  plan’s  total  allocation32.  Of  the  six 
components in the plan, three include expenditure that contributes to the digital objectives. 

Malta’s  recovery and resilience plan correctly follows the methodology  for  digital tagging 
set out in Annex VII to the RRF Regulation, by identifying intervention fields and corresponding 
coefficients  for  the  calculation  of  each  measure’s  contribution  to  the  digital  objectives.  The 
following should be noted: 

  The proposed reform measures for the digital contribution do not have any associated cost 
to  be  funded  under  the  recovery  and  resilience  plan.  In  this  context,  the  plan  does  not 
identify intervention fields for these measures, and they do not contribute to reaching the 
digital target. 

  Some measures of the recovery and resilience plan consist of several sub-measures. For 
these  measures,  the  plan  indicates  an  intervention  field  for  each  sub-measure  and 
computes the digital contribution at sub-measure level. 

  The choice of intervention fields for the digital transformation is well justified and reflects 

the nature, focus, objective or expected outcome of the investments. 

  The recovery and resilience plan does not propose to increase the digital coefficients for 
measure.

any 

32 Table 8 in the Annex presents the detailed application of the digital tagging methodology for all measures and sub-

measures with a digital contribution. 

57 

 
 
                                                           
Table 7: Digital contribution and cost per component 

Component 

C1  Addressing  climate  neutrality  through 
enhanced  energy  efficiency,  clean  energy 
and a circular economy 
C2  Addressing  carbon  neutrality  by 
decarbonising transport 
C3  Fostering  a  digital,  smart  and  resilient 
economy 
C4  Strengthening  the  resilience  of  the 
health system 
C5  Enhancing  quality  education  and 
fostering socio-economic sustainability 
C6 
framework 
Overall contribution 

Strengthening 

institutional 

the 

Cost 

(EUR million) 

Digital 
contribution 
(EUR million) 

Digital 
contribution 
(percentage  of 
plan’s 
total 
allocation) 

77.9 

110.4 

55.3 

49.9 

41.4 

10 

- 

- 

55.3 

15.5 

- 

10 

80.8 

- 

- 

17.5% 

4.9% 

- 

3.2% 

25.5% 

Note: the plan’s total allocation is EUR 316,403,496. This corresponds to the financial allocation after deduction of 
Malta’s proportional share of the expenses of Article 6(2) of Regulation (EU) 2021/241, calculated in accordance 
with the methodology of Article 11 of that Regulation. The amount of the estimated total costs of the recovery and 
resilience plan is higher than the plan’s total allocation. 

Digital transition 

Malta’s  recovery  and  resilience  plan  addresses  the  challenges  related  to  the  digital 
transition  by  focusing  on  strengthening  public  administration  services  and  supporting 
business digitalisation. Component 3 on digitalisation is fully dedicated to the digital transition 
and consists of four investments and two complementary reforms focusing on digitalisation of the 
public and private sectors. Component 4 on the health system devotes a considerable share of its 
resources to the digital transition in the healthcare sector. The investment under Component 6 on 
the institutional framework is earmarked for digitalising Malta’s judicial system. 

The  digital  measures  in  the  plan  contribute  to  the  ‘modernise’  EU  flagship  initiative  laid 
down  in  the  Commission’s  Annual  Sustainable  Growth  Strategy  (COM/2020/575).  The 
envisaged  reforms  and  investments  related  to  the  digital  transition  will  notably  strengthen  the 
resilience, accessibility and security of government digital infrastructures and services, including 
the justice and healthcare systems. 

Overall, the digital measures in the Maltese plan are well aligned with the digital objectives 
of  the  RRF.  The  measures  of  the  plan  cover  three  areas  identified  in  Annex  VII  to  the  RRF 
Regulation: 

58 

 
 
 
-  digitalisation of public services; 
-  digitalisation of businesses; and 
- 
investment in human capital. 

The  recovery  and  resilience  plan  contains  reforms  to  facilitate  digital  transition  and 
modernisation  in  Malta.  One  reform  in  the  plan  envisages  developing  and  implementing 
initiatives regarding the three main objectives of Malta’s upcoming Digital Strategy 2021-2027: 
(i) to reduce the digital divide (notably by supporting families with low income to get connected 
and  have  access  to  computers,  and  to  related  knowledge);  (ii)  to  promote  digital  skills  (in 
particular  by  developing  a  set  of  initiatives  for  upskilling  and  increasing  Malta’s  pool  of  ICT 
professionals);  and  (iii)  to  improve  digital  public  services  (including  their  delivery,  the  use  of 
emerging technologies and the provision of open access to public government databases). While 
the plan envisages investments to address the third objective, implementation of the measures to 
reduce the digital divide and promote digital skills development will be supported by national and 
other  EU  funding,  outside  the  plan.  Another  reform  included  in  the  plan  will  establish  and 
implement  a new policy framework for smart  specialisation, with  a focus on fostering business 
research & innovation and strengthening public-private cooperation to transform research results 
into market-ready solutions.  

The  main  share  of  the  investments  relating  to  the  digital  transition  is  dedicated  to 
digitalisation  of  the  public  administration  and  public  services.  The  plan  includes  three 
investments for their digitalisation, amounting to EUR 40.3 million: 

(i)  The plan envisages an investment in the government’s digital backbone to strengthen its 
resilience,  capacity  and  security  and  to  increase  the  homogeneity,  standardisation  and 
sharing  of  services  across  the  public  administration  (investment  C3.I.1).  The  digital 
backbone will also serve as the horizontal foundation to enable principles of digitalisation, 
such as the once-only-principle, and sharing of data. This investment is also expected to 
include the provision of training to public officers, in particular on cybersecurity and the 
use  of  new  technologies.  Broader  action  for  the  development  of  digital  skills  will  be 
supported through the use of other EU funding programmes, such as the European Social 
Fund Plus. 

(ii)  Another investment will facilitate digitalisation of Transport Malta’s Merchant Shipping 
Directorate. This will help ensure more efficient regulatory practices and improve internal 
operations,  customer  relations  and  administration  within  that  directorate  (investment 
C3.I.2). Training for the upskilling of public officers is also envisaged. 

internal  services  within 

(iii)  In  the  context  of  the  digitalisation  of  public  services,  the  plan  will  also  improve  public 
the  public  administration,  front-end  customer 
services, 
experience,  data  sharing  and  reuse,  virtual  desktops,  the  property  transfer  process,  the 
national single window for customs, and digital tools for remote work of public officers 
(investment  C3.I.3).  These  improvements  are  in  particular  targeted  at  increasing  the 
uptake  of  e-government  services  by  the  population;  this  has  been  a  challenge  in  Malta. 
The plan also envisages  a client-centric design of services, which will involve clients to 
identify and resolve their needs and challenges. 

59 

 
 
The  recovery  and  resilience  plan  is  also  expected  to  intensify  digitalisation  of  the  private 
sector.  The  plan  envisages  the  establishment  of  several  measures,  with  a  budget  of 
EUR 15 million, to support the digitalisation of companies in various economic sectors, including 
wholesale  and  retail,  tourism  (including  culture)  and  manufacturing  (investment  C3.I.4).  This 
measure  will  help  companies  digitalise  their  operations  (in  terms  of  hardware,  software  and 
digital  solutions),  and  hence  improve  their  efficiency,  productivity  and  customer  experience.  It 
will  target  investments  in  areas  such  as  the  internet  of  things  (IoT),  cybersecurity  and  data 
protection,  augmented  reality  and  artificial  intelligence.  Support  is  envisaged  for  SMEs, 
including  micro-enterprises  and  the  self-employed.  It  will  be  complementary  to  the  support 
provided under the European Regional Development Fund.  

The  recovery  and  resilience  plan  includes  significant  investment  (EUR  15.5  million)  in 
digitalisation  of  the  healthcare  system.  The  plan  is  expected  to  fast-track  the  transition  of 
Malta’s  healthcare  system  to  be  able  to  rely  more  on  digitalisation  and  new  technologies.  The 
digital transformation of outpatient and consumer engagement processes — by enabling effective 
resource utilisation, time management and workflows — will improve the quality of patient care 
and patient experience and reduce waiting times (investment C4.I.2).  

The  recovery  and  resilience  plan  devotes  sizeable  funds  (EUR 10 million)  to  the 
digitalisation  of  Malta’s  justice  system.  The  plan  envisages  implementation  of  a  number  of 
secure digital solutions and tools to support users in the justice sector through collaboration and 
integration,  increased  accessibility  to  justice,  and  greater  efficiency  (investment  C6.I.1).  In 
particular, the plan provides for digital solutions that will cater for an integrated e-filing system 
across  the  justice  system.  Other  digital  solutions  will  target  the  particular  needs  of  different 
segments and stakeholders within the justice system. The primary stakeholders concerned by the 
relevant  measures  are  the  law  courts,  Malta’s  police  force,  the  State  Advocate,  the  Attorney 
General, the Legal Aid Agency and the Asset Recovery Bureau. 

Overall, the above-mentioned measures in the plan are expected to have a lasting impact on 
Malta’s  ability  to  seize  the  opportunities  offered  by  the  digital  transition  and  address  the 
challenges resulting from it. The plan will make an important contribution to ensuring a citizen- 
and service-oriented public administration with a modern and secure digital infrastructure. It will 
also  be  key  to  increasing  the  variety,  efficiency  and  quality  of  digital  public  services  and  to 
limiting the administrative burden on individuals, companies and the administration. To achieve a 
long-term  and  transformative  impact,  it  will  be  important  to  couple  these  investments  with 
capacity  building,  ensure  interoperability  of  different  digital  solutions  and  systems,  and  give 
appropriate consideration to the security and resilience of the infrastructure and services that will 
be acquired. Further spillover effects will also be achieved through the involvement of the private 
sector, i.e. Maltese SMEs and start-ups, in the development of enhanced services. 

In addition to the public sector, the plan will provide important support to digitalising the 
private sector, notably SMEs in several  industries, thus strengthening the competitiveness 
of Malta’s economy. To maximise the impacts of this measure, it is particularly important to link 
investments in digital assets with investments in reskilling and upskilling of workers, in order to 
build  capacities  and  promote  truly  transformative  digitalisation  processes  among  SMEs. 

60 

 
 
Moreover,  a  strong  synergy  should  be  ensured  between  investments  for  digitalisation  of 
businesses and measures to reinforce cybersecurity capacities under investment C3.I.1.  Through 
digitalisation,  the  plan  will  also  improve  the  functioning  of  the  healthcare  and  justice  systems, 
increasing their accessibility and efficiency.  

Conclusion on the assessment of criterion 2.6 of Annex V to the RRF Regulation 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  recovery  and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  digital 
transition or to address the challenges resulting from it and ensures that at least 20% of its total 
allocation  contribute  to  support  digital  objectives.  This  would  warrant  a  rating  of  A  under 
criterion 2.6 of Annex V to the RRF Regulation. 

4.7. Lasting impact of the plan 

The  proposed  reforms  and  investments  are  expected  to  have  a  lasting,  positive  impact  on 
Malta’s economy and society. The recovery and resilience plan includes an ambitious package 
of measures aimed at addressing challenges identified in the context of the European Semester. 
The  measures  also  facilitate  the  green  and  digital  transition  and  strengthen  Malta’s  growth 
potential, job creation and economic and social resilience. 

Structural change in administration and institutions 

The  plan  presents  structural  changes  in  the  country’s  public  administration  and  related 
institutions.  This  is  particularly  the  case in  components  addressing the institutional framework 
(Component 6), digitalisation (Component 3), and health (Component 4). 

The  plan  is  expected  to  strengthen  the  institutional  framework  of  Malta’s  justice  system 
and law enforcement entities. Reforms that create better safeguards for the independence of the 
justice  system  and  improve  its  functioning  are  important  to  ensure  its  effectiveness  and 
strengthen  trust  in  the  institutions  while  also  improving  the  business  environment.  Important 
reforms  are  included  to  strengthen  the  independence  of  the  judiciary,  increase  the  quality  and 
efficiency  of  the  justice  system,  reinforce  anti-corruption  entities,  create  a  separate  and  more 
accountable prosecution service,  and increase transparency in  the appointment of top  positions. 
Institutions  combating  money  laundering  are  also  expected  to  be  further  strengthened  through 
targeted training, the implementation of the national ‘anti-money laundering/combating terrorist 
financing/targeted  financial  sanctions’  strategy  and  action  plan,  addressing  pending  actions 
required  by  the  Financial  Action  Task  Force,  and  through  capacity  building  and  better 
functioning of the Asset Recovery Bureau. 

The  plan  aims  to  boost  digital  preparedness  of  the  public  administration  and  improve 
public services  for citizens.  This  is true for, among other things, the merchant  shipping sector 
within Transport Malta and the Maltese law courts. These investments are expected to improve 
the effectiveness and efficiency of public administration by providing end-users a better service 
and quick access to information, while also enabling remote access of certain services, including 
justice. Service providers themselves will also benefit from improved technologies by improving 
their own working methods. 

61 

 
 
The health component also envisages a number of institutional changes that aim to improve 
the  sustainability,  resilience  and  quality  of  the  health  system.  A  resilient  and  high-quality 
healthcare system  is  important  given the significant  ageing of Malta’s population  and the rapid 
influx of foreign workers. By balancing capital expenditure costs with innovative treatments that 
would otherwise be sought overseas, Malta seeks to reduce its long-term health expenditure. The 
component  also  aims  to  address  an  important  concern  in  the  functioning  of  Malta’s  health 
system, namely its human capital. By addressing barriers to the hiring, retention and integration 
of foreign workers, the plan aims to improve the internal structures of Malta’s health service. 

Structural change in policies 

All  components  include  long-lasting  policy-related  structural  changes.  The  most  prominent 
are  the  components  addressing  the  circular  economy:  renewable  energy  and  renovation  of 
buildings (Component 1), and decarbonising transport (Component 2); as well as education and 
socio-economic sustainability (Component 5). In addition, reforms proposed to address concerns 
of  aggressive  tax  planning  (Component  6)  are,  to  some  extent,  also  expected  to  have  a  lasting 
impact through changes in taxation policy. 

Structural policy changes target sustainable construction, to curb carbon emissions and to 
improve  waste  prevention  and  management.  Malta  aims  to  develop  a  long-term  building 
renovation strategy that will pave the way for the decarbonisation of its building stock by 2050. 
The  setting  up  of  a  building  authority  will  remedy  the  fragmentation  of  responsibilities  that 
represents a major barrier to this objective, while the renovation of a number of private sector and 
public  buildings  will  act  as  a  model  for  further  renovations.  Waste  management  is  also  being 
reformed  through  the  reorganisation  of  waste  collection,  extending  the  producer  responsibility 
framework to additional waste streams, limiting the production and sale of single-use plastic, and 
measures addressing construction and demolition waste. Targeting sustainable construction, and 
its  waste,  is  an  important  structural  policy  change  given  the  rapid  growth  in  this  sector  that 
followed the strong growth in population and tourist arrivals. 

Several  measures  contribute  to  addressing  traffic  congestion  and  emissions,  which  have 
increased in line with population growth. The plan aims at reducing car usage through several 
measures, including better sea transport, promoting the use of public transport and ride-sharing in 
the  public  service,  and  creating  pedestrian  open  spaces  in  urban  areas.  Investments  also  aim to 
reduce the transport sector’s carbon footprint through electrification of vehicles in the private and 
public sectors, including part of the public transport fleet. 

With education and training having been repeatedly outlined as a challenge for Malta in the 
European Semester, the plan proposes structural policy changes in this area. These aim to 
strengthen measures to prevent and intervene on early school leaving, create opportunities for the 
upskilling and reskilling of adults to match emerging skill needs, improve inclusive education for 
pupils with special needs, and improve the education policy monitoring system. Tourism studies, 
an important sector of the Maltese economy, is also being directly targeted through the creation 
of  a  new  centre  for  vocational  education  in  this  field.  A  higher  quality  service  provided  in  the 
hospitality  industry  could  attract  higher  value-added  tourists  to  the  island.  In  addition,  the 

62 

 
 
sustainability  of  public  finances  is  also  being  addressed  through  further  development  of  the 
regular analysis and monitoring of the pension and unemployment benefits systems. 

Malta  has  also  taken  certain  steps  to  address  concerns  of  aggressive  tax  planning.  Four 
reforms target aggressive tax planning by corporates and individuals; these reforms are expected 
to  have  an  impact  on  tax  avoidance.  Malta  plans  to:  remove  the  tax  exemption  on  dividends 
derived  from  entities  resident  in  jurisdictions  listed  in  the  Code  of  Conduct  Group  list  of  non-
cooperative  jurisdictions;  prevent  a  loss  in  public  revenues  stemming  from  international  tax 
arbitrage by introducing transfer pricing legislation; carry out a study — with legal amendments 
to  follow  —  to  mitigate  the  risks  of  aggressive  tax  planning  stemming  from  inbound  and 
outbound  dividend,  interest  and  royalty  payments;  and  introduce  a  spontaneous  exchange  of 
information  mechanism  with  the tax jurisdictions of individuals who obtain Malta’s citizenship 
under the citizenship scheme. 

Lasting impact 

The  plan  addresses  most  of  the  challenges  outlined  in  the  European  Semester.  These  are 
linked  to  pressures  on  environmental  degradation  and  climate  change  caused  by  the  rapid 
population  growth,  difficulties  linked  to  a  tight  labour  market  and  skills  shortages,  the  need  to 
strengthen  Malta’s  law  enforcement  structures  and  anti-money  laundering  efforts,  taxation, 
ensuring better health and educational service provisions, and also reinforcing measures to better 
prepare the economy for a digital transformation. 

The  measures  proposed  are  expected  to  have  a  positive  and  lasting  impact  on  Malta’s 
economy  and  well-being.  The  plan  is  expected  to  contribute  to:  reduced  energy  consumption; 
improved air quality; reduced noise pollution; better work-life balance; improved access to, and 
efficiency of, government services to businesses and individuals; improved access to, and quality 
and resilience of, healthcare, social protection and educational services; bridging the gap between 
education  provision  and  labour  market  needs;  reduced  risks  of  aggressive  tax  planning  and 
money  laundering;  and  strengthened  institutions  with  positive  spillover  effects  on  the  business 
environment. 

Conclusion on the assessment of criterion 2.7 of Annex V to the RRF Regulation  

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Malta  in  its  recovery  and 
resilience  plan,  their  implementation  is  expected,  to  a  large  extent,  to  bring  about  a  structural 
change  in  the  administration  or  in  relevant  institutions,  and  in  relevant  policies,  and  to  have  a 
lasting  impact.  This  would  warrant  a  rating  of  A  under  criterion  2.7  of  Annex  V  to  the  RRF 
Regulation. 

4.8. Milestones, targets, monitoring and implementation  

Adequacy  of  the  structure  tasked  with  implementation  of  the  plan,  monitoring  of  progress  and 

reporting 

The  management  structure  is  well  defined  and  responsibilities  are  clearly  allocated.  The 
Ministry responsible for the management of EU funds is empowered to perform the tasks related 

63 

 
 
to  coordination,  management  and  control.  It  will  act  as  head  of  the  RRP  —  and  be  the  main 
contact  for  the  Commission  —  and  national  coordinating  authority  for  the  Technical  Support 
Instrument  and  all  other  EU  funds.  This  ensures  an  appropriate  expertise  built  on  the 
programming  and implementation  of EU funds,  tailored to  the specificities of the recovery and 
resilience plan. Within the Ministry responsible for the management of EU funds, the Planning 
and  Priorities  Coordination  Division  (PPCD)  has  been  designated  to  provide  leadership, 
coordination  and  overall  oversight,  thereby  extending  the  EU  cohesion  funds  governance 
framework to the recovery and resilience plan. Within the PPCD, the horizontal unit will perform 
the internal control tasks related to the monitoring of the achievement of milestones and targets 
prior to the submission of the payment claim to the Commission, while the RRP unit will carry 
out  the  tasks  related  to  implementation  of  the  plan.  Both  units  are  assigned  separate  staff  with 
clearly defined responsibilities to ensure compliance with the principle of separation of functions 
between implementation and control. 

The  plan  describes  adequately  the  intended  monitoring  and  reporting  mechanisms.  The 
management and information system maintained by the PPCD will be used for the recovery and 
resilience plan. The system has been subject to various audits performed at national and EU level. 
The  system  is  available  to  record  and  store  operational  data,  including  data  related  to  final 
recipients  in  line  with  EU  requirements.  This  system  will  collect  the  necessary  information  to 
monitor  the  whole  life  cycle  of  the  reforms  and  investments,  including  milestones,  targets  and 
information supporting the monitoring of their financial implementation. Proportionate reporting 
requirements  will  be  imposed  on  recipients  of  EU  funding  to  ensure  that  data  needed  for 
monitoring  the  implementation  are  collected  efficiently,  effectively  and  in  a  timely  manner.  In 
addition, all beneficiaries involved in the implementation of operations will maintain a separate 
accounting system and an appropriate accounting code for all transactions. 

Milestones, targets and indicators 

The milestones and targets included in the Maltese plan constitute an appropriate system 
for  monitoring  the  plan’s  implementation.  The  selected  milestones  and  targets  represent  the 
key  elements  of  the  proposed  investment  and  reform  measures  over  their  life  cycle.  They  are 
sufficiently clear and comprehensive to ensure that their completion can be traced and verified. 
They  reflect  adequately  the  overall  level  of  the  plan’s  ambition  and  appear  realistic.  The 
milestones  and  targets  appear  well  timed  throughout  the  plan’s  implementation  schedule.  The 
verification mechanisms, data collection and responsibilities described by the Maltese authorities 
appear sufficiently robust to verify the completion of milestones and targets, and to justify in an 
adequate manner the disbursement requests. 

Overall organisational arrangements 

The overall organisation is appropriate. The various institutions in charge of implementing the 
measures  are  clearly  indicated  in  the  description  of  the  six  components,  ensuring  clarity, 
transparency and accountability. An overall institutional coordination mechanism is put in place. 
The responsible institutions involved in the execution of each reform and investment will liaise 
on a regular basis with the Ministry responsible for the management of EU funds, which will act 

64 

 
 
in  close  cooperation  with  the  Ministry  for  Finance  and  Employment.  The  PPCD  will  have  a 
central role in providing coordinated leadership and implementation support to other key actors 
involved  in  the  process,  including  the  recovery  and  resilience  plan  beneficiaries  and  line 
ministries.  Staff  will  benefit  from  an  annual  training  plan  tailored  to  the  specificities  of  the 
recovery  and  resilience  plan.  In  addition,  newly  recruited  staff  will  benefit  from  additional 
training. 

Conclusion on the assessment of criterion 2.8 of Annex V to the RRF Regulation 

The  arrangements  proposed  by  Malta  in  its  recovery  and  resilience  plan  are  expected  to  be 
adequate to ensure effective monitoring and implementation of the recovery and resilience plan, 
including the envisaged timetable, milestones and targets, and the related indicators. This would 
warrant a rating of A under the assessment criterion 2.8 of Annex V to the RRF Regulation. 

4.9. Costing  

Malta  has  provided  estimated  costs  for  each  investment  included  in  the  recovery  and 
resilience  plan.  All  costs  are  incurred  after  February  2020  and  do  not  substitute  recurring 
national budgetary expenditure, subject to a few duly justified exceptions, therefore meeting the 
requirements  of  Article  5  of  the  Regulation.  No  costs  were  associated  with  the  reforms  in  the 
plan. The cost breakdown is generally detailed and well substantiated. While the tables proposed 
in the standard template were duly filled in and presented, Malta did not provide an independent 
validation for any of the cost estimates proposed. The assessment of the cost estimates and other 
supporting  documents  show  that  a  large  majority  of  the  costs  are  reasonable  and  plausible. 
However,  in  some  limited  cases,  further  supporting  evidence  and  clearer  justification  for  the 
assumptions  made  for  some  measures  would  have  been  needed  to  reach  a  fully  positive 
assessment. 

Reasonable costs 

The cost estimates are generally based on well-documented and comprehensive calculations 
and sound underlying assumptions. For the most part, the estimates are based on comparisons 
with  procurement  contracts  for  similar  services  or  past  investments  of  a  similar  nature.  Where 
these are missing, costs are based either on expert judgement of responsible agencies (e.g. Malta 
Information Technology Agency for government backbone digitalisation) or private consultants 
(e.g.  PwC  for  digitalisation  of  the  Merchant  Shipping  Directorate).  The  methodology  and 
calculations  are,  for  the  most  part,  clearly  described  and  backed  up  by  sound  assumptions. 
Nevertheless,  in  a  few  cases  the  final  cost  estimate  deviates  from  the  underlying  source  data 
without  a  full  explanation  of  the  reasons  for  such  a  deviation.  For  most  measures,  there  are 
references  to  similar past  projects  and the supporting evidence was provided, with  very limited 
exceptions. 

At the level of the plan, the costs are deemed, to a medium extent, reasonable.  Taking into 
account  the  limits  of  ex  ante  assessment  of  cost  estimates,  the  proposed  amounts  have  been 
deemed appropriate for most of the measures. 

65 

 
 
Plausible costs 

The amount of the estimated total costs of the recovery and resilience plan is in line with the 
nature and type of envisaged investments. For most investments, cost estimates are referenced 
to  past  projects  of  a  similar  nature  for  which  clear  supporting  documentation  is  provided,  thus 
justifying the applied unit costs. Further adjustments to the main cost drivers are generally well 
explained. In some cases, explanations for the adjustments made as compared with the evidence 
based on past projects were not sufficiently detailed. 

No double EU financing 

The plan confirms that all investments will be financed solely by the RRF. Malta asserts that 
demarcation between various funding sources is specified already at the programming stage. This 
aims to ensure that the same cost will not be covered by both the recovery and resilience plan and 
other EU financing, in line with the provisions of Article 9 of the RRF Regulation. Given efforts 
to  make  a  clear  delineation  between  funds,  the  plan  does  not  envisage  complementarity  of 
funding  with  other  EU  funds  for  the  same  investment.  Nevertheless,  separate  individual 
investments  financed  by  different  funds  aim  to  complement  each  other  in  order  to  increase 
impact.  Malta  has  also  put  in  place  structures  at  national  level  that  should  ensure  consistency 
between  funding  and  avoid  double  funding  (see  further  details  in  Section  4.10  Controls  and 
audit). 

Commensurate and cost-efficient costs 

The  amount  of  the  estimated  total  cost  of  the  plan  is  commensurate  with  its  expected 
economic  and  social  impact  and  is  in  line  with  the  principle  of  cost  efficiency.  The 
reasonability  and  plausibility  of  estimated  costs  is  considered  to  be  medium.  Moreover,  the 
measures  presented  in  the  plan  are  projected  to  have  a  stimulating  impact  on  the  Maltese 
economy and job creation (see Section 4.3), thus mitigating the negative impact of the COVID-
19 crisis. 

Conclusion on the assessment of criterion 2.9 of Annex V to the RRF Regulation 

The justification provided by Malta on the amount of the estimated total costs of the recovery and 
resilience  plan  is,  to  a  medium  extent,  reasonable,  plausible,  in  line  with  the  principle  of  cost-
efficiency  and  is  commensurate  to  the  expected  national  economic  and  social  impact.  Malta 
provided sufficient information and evidence that the amount of the estimated cost of the reforms 
and  investments  of  the  recovery  and  resilience  plan  to  be  financed  under  the  Facility  is  not 
covered  by  existing  or  planned  Union  financing.  This  would  warrant  a  rating  of  B  under  the 
assessment criterion 2.9 of Annex V to the RRF Regulation. 

4.10.  Controls and audit  

Robustness of internal control system and distribution of roles and responsibilities 

The  plan  provides  sufficiently  detailed  information  on  the  national  set-up  for  the  RRF 
internal control system, which is similar to the one used for EU cohesion policy funds. The 

66 

 
 
Ministry responsible for the management of EU funds in Malta will act as the RRP Coordinator. 
The Ministry is entrusted with the authority to fulfil all relevant tasks related to the management 
and control of the recovery  and resilience plan  and will be the single point  of contact  with the 
Commission for the plan. Within the Ministry, the Planning and Priorities Coordination Division 
(PPCD)  has  been  designated  to  provide  the  necessary  leadership,  monitoring  and  oversight 
concerning the plan’s implementation. It will also be responsible for the drawing up and signing 
of  management  declarations  and  summaries  of  audits,  and  for  submitting  payment  requests.  A 
new  RRF  Unit  within  the  PPCD  will  be  created  and  headed  by  a  manager  responsible  for 
overseeing  implementation  of  the  plan  and  the  achievements  of  agreed  milestones  and  targets. 
Effective implementation will also be under the direct responsibility of the PPCD. In addition, the 
existing PPCD horizontal unit will carry out  the  internal  control function on the verification of 
expenditure and on the achievement of planned milestones and targets. 

The PPCD will enter into agreements with the bodies responsible for implementing the respective 
investments  or  reforms.  The  line  ministries  will  be  primarily  responsible  for  overseeing  the 
individual bodies’ implementation of interventions within the ministerial portfolio. 

The audit authority is  the Internal  Audit & Investigations Department (IAID). This  is  the 
same  audit  authority  as  that  for  EU  cohesion  policy  funds.  Its  independence  from  the 
coordination body and institutions responsible for implementing the reforms and investments will 
be ensured. Therefore, the segregation of duties principle will be respected. The internal control 
system  seems  to  be  robust.  The  plan  presents  a  well-defined  structure  of  the  internal  control 
system. This particularly applies to the collection and verification of data on the achievement of 
milestones  and  targets.  The  plan  specifies  the  sources  of  relevant  information  and  the 
transmission  channel  that  the PPCD will use to  collect  them.  It also  stipulates that the PPCD’s 
RRP unit will verify them. 

Adequacy of control systems and other relevant arrangements 

The  outline  of  the  control  system  put  in  place  seems  appropriate  and  relevant  actors  are 
identified across all levels. The level of information is not sufficient to draw conclusions on the 
adequacy  of  management  verifications  to  be  carried  out  by  institutions  responsible  for 
implementation of the reforms and investments at component level. However, at plan level, the 
management verifications will consist in both: (i) administrative/documentary verifications with 
respect to each application for reimbursement by beneficiaries; and (ii) on-the-spot verifications 
of operations to  check whether  milestones and targets  have been achieved, and the accuracy of 
the information provided by the beneficiary regarding material and financial implementation. All 
interventions will be subject  to  at  least  one on-the-spot verification during their lifetime.  In the 
case  where  an  action  would  involve  too  many  beneficiaries,  a  sampling  methodology  will  be 
applied. Moreover, within six months of the plan’s approval and ahead of the first interim request 
for payment, Malta will carry out a risk assessment and put in place the risk register linked to the 
plan. This will strengthen the internal control system by putting in place the mitigation measures 
appropriate  for  dealing  with  the  prevention,  detection  and  correction  of  cases  of  conflict  of 
interest,  corruption,  fraud  and  double  funding.  The  PPCD  will  also  ensure  that  the  plan  is 
implemented  in  compliance  with  relevant  EU  and  national  law,  including  avoiding  the 

67 

 
 
abovementioned serious irregularities. The PPCD will use a checklist to assess compliance with 
EU  and  national  law,  identify  any  shortcomings  and  identify  any  red  flags  that  signal  the 
suspicion  of  serious  irregularities.  Furthermore,  the  institutional  framework  capacity  to  fight 
corruption is expected to be reinforced through implementing the capacity building elements of 
the national anti-fraud and corruption strategy, which has recently been adopted (more details are 
provided in the analysis on Component 6). 

The second level of the control system is entrusted to an independent audit body that acts 
with  complete  autonomy  and  independence  from  the  bodies  responsible  for  managing  the 
actions and operations covered by each component. The plan provides a general description of 
the  audit  approach.  The  audit  checks  will  focus  on  both  system  audits  and  operations  audits. 
Malta commits in the plan to finalise the first audit strategy within three months of adoption of 
the  recovery  and  resilience  plan.  The  first  system  audit  will  be  carried  out  before  the  first 
payment  claim  and  will  cover  the  main  coordinating  body  (PPCD),  the  records  kept,  the  risk 
register put in place by  PPCD and the IT system used for management and control. As regards 
operations audits, the audit authority will perform audits on an appropriate sample basis.  

The plan indicates that the IT system (MIS system) supporting the control and monitoring 
function is already operational to support the plan’s implementation. The same system will 
be  used  for  the  collection  and  storage  of  data  on  final  beneficiaries  in  accordance  with  the 
provisions  of  Article  22(2)(d)  of  the  Regulation.  This  system  will  be  also  used  for  the  EU 
cohesion  policy  funds  in  the  programming  period  2021-2027.  The  plan  points  out  the  access 
rights of EU bodies to the data, as per Article 22(2)(e). 

Adequacy of arrangements to avoid double EU funding 

The  Maltese  authorities  have  put  in  place  the  following  mechanisms  and  tools  to  address 
double funding: 

(i) 

(ii) 
(iii) 
(iv) 

(v) 
(vi) 

demarcation lines at the stage of programming of individual programmes co-financed 
by the EU;  
ex ante analysis at the stage of project selection;  
two meetings every year with responsible bodies for EU cohesion policy funds;  
the  use  of  Arachne  (the  data  mining  and  risk  scoring  tool  made  available  by  the 
Commission) and the MIS system (which is also used for structural funds); 
on-the-spot checks to ensure the beneficiary is providing accurate information; and  
self-declaration  by  beneficiaries  as  to  whether  any  item  of  expenditure  supported 
under  the  recovery  and  resilience  plan  is  also  being  supported  under  other  funding 
sources. 

The  implementing  bodies  for  the  Recovery  and  Resilience  Facility  are  the  same  as  those 
implementing  the  cohesion  policy  funds,  which  gives  additional  assurances  for  cross-checking 
the  data  and  avoiding  double  funding.  The  relevant  authority  also  undertakes  a  project  risk 
approach  that  will  determine  the  frequency  of  follow-up  by  the  authority  responsible  for 
monitoring  the  project  in  question.  Furthermore,  all  beneficiaries  have  to  provide,  on  a  yearly 

68 

 
 
basis, a confirmation that no other funds have been requested or received to finance the same — 
or part of the same — operation(s). 

Legal empowerment and administrative capacity of control function 

The  Ministry  responsible  for  the  management  of  EU  funds  in  Malta  is  the  Office  of  the 
Prime  Minister.  Similarly,  the  audit  authority,  the  IAID,  is  an  independent  department, 
established by legal act, in the Office of the Prime Minister. Malta indicates that, in line with the 
Constitution, the Prime Minister decides how portfolios are allocated and therefore no other legal 
empowerment is required. These authorities, therefore, are legally entrusted with the duties in the 
context of the RRF as described in the plan.  

As regards the administrative capacity of the coordinating body PPCD, Malta has provided 
information on the new RRF unit to be constituted by six officers, and on two new additional 
positions in the horizontal unit. In addition, the plan specifies that, in the audit body, three staff 
members will be involved in the RRF audits. The plan also provides for the possibility, if needed, 
to outsource certain RRF audit tasks to external auditors, similar to the practice under cohesion 
policy.  

Conclusion on the assessment of criterion 2.10 of Annex V to the RRF Regulation 

The arrangements proposed by Malta in  the recovery and resilience plan  to  prevent,  detect  and 
correct  corruption,  fraud  and  conflicts  of  interest  when  using  the  funds  provided  under  the 
Facility, including the arrangements aimed to  avoid  double funding from  the Facility and other 
Union  programmes,  are  assessed  to  be  adequate.  This  would  warrant  a  rating  of  A  under  the 
assessment criterion 2.10 of Annex V to the RRF Regulation. 

4.11.  Coherence  

The  Maltese  recovery  and  resilience  plan  builds  on  Malta’s  “Sustainable  Development 
Vision for 2050” and is recognised as one of the key instruments for its implementation. The 
plan includes a set of consistent, coherent and mutually supportive reforms and investments that 
are proportional and commensurate with the overall long-term development objectives.  

Mutually reinforcing measures  

Each  component  includes  reforms  and  investments  that  are  consistent  and  mutually 
reinforcing. No cases have been observed where the measures proposed within any component 
(be  it  reforms  or  investments)  contradict  or  undermine  any  other’s  effectiveness.  Under 
Component 1, the reforms to strengthen the regulatory framework and ensure a sufficient pool of 
well-prepared  staff  for  the  buildings  sector  create  the  appropriate  conditions  to  support  the 
implementation of planned investments, such as the renovation of a number of private sector and 
public  buildings,  public  schools  and  hospitals.  Under  Component  2,  the  policies  promoting  the 
use of collective and multimodal transport are linked with planned investments in the purchase of 
electric  buses  and  other  investment  to  promote  alternative  modes  of  transport.  These  include 
notably the building of the new ferry-landing site with electric charging infrastructure, and which 
is  served  by  electric  buses.  The  reforms  regarding  public  sector  mobility  management  creates 

69 

 
 
enabling conditions for investment in the electrification of the public vehicle fleet. The reforms 
under  Component  3  to  strengthen  the  national  regulatory  framework  are  complemented  by 
investments to sustain the digitalisation process of the public administration and public services 
and  to  strengthen  initiatives  related  to  digitalisation  of  the  private  sector.  Under  Component  4, 
one reform is intended to address any regulatory gaps and bottlenecks for the full exploitation of 
the  new  Blood,  Tissue  and  Cell  Centre.  Additional  reforms  included  under  Component  5  to 
strengthen early school leaving prevention measures, to diversify opportunities for upskilling and 
reskilling for all adults and to improve quality inclusive education for pupils with special needs 
are complemented by the investment in the new Centre of Vocational Education Excellence (ITS 
campus). These examples demonstrate the coherence and complementarity between the reforms 
and investments included in each component. 

Complementarity of measures  

Skilling  and  upskilling  is  envisaged  under  various  components,  which  reinforce  and 
complement  each  other.  The  reforms  and  investments  in  skilling  and  upskilling  set  down  in 
Component  5  are  complemented  by  additional  reforms  under  other  components.  Under 
Component 1, this relates to the implementation of a mandatory skills card for training in energy 
renovations.  Under  Component  4,  it  relates  to  the  planning  of  a  training  needs  analysis,  an 
upgrade of the central HR database, and the development of a tool for health workforce planning. 
Under  Component  6,  it  relates  to  the  training  and  capacity  building  for  officials  in  national 
authorities that fight fraud and corruption and anti-money laundering, and of parties involved in 
the  newly  proposed  transfer  pricing  rules,  including  tax  administration  staff,  private  tax 
practitioners and company representatives. Furthermore, the measures under Component 5 for the 
skilling  and  upskilling  of  low-skilled  adults  are  expected  to  be  facilitated  by  the  effective 
implementation  under  Component  3  of  the  reform  to  reduce  the  digital  divide  and  increase  the 
pool of ICT specialists. 

The  digitalisation  of  public  administration,  health  and  justice  complement  each  other  in 
improving accessibility and quality of various public services for individuals and businesses. 
The  fast-tracking  of  the  digital  transformation  of  public  administration  under  Component  3  is 
expected to complement the digitalisation of the justice system under Component 6 in improving 
efficiency of the public sector and reducing compliance and accessibility costs for individuals and 
businesses.  The  digitalisation  of  the  health  system  under  Component  4  pursues  the  same 
objective through changes to the outpatient and consumer engagement process.  

Component  1  and  Component  2  act  together  to  ensure  economic  circularity  and  climate 
neutrality.  Reforms  and  investments  in  the  building  and  waste  sector  under  Component  1  are 
reinforced  by  measures  under  Component  2  to  decarbonise  the  transport  sector.  Under 
Component  1,  reforms  to  strengthen  the  regulatory  framework  and  ensure  a  sufficient  pool  of 
well-prepared  staff  for  the  buildings  sector  are  accompanied  by  the  implementation  of  planned 
investments in buildings renovation. Under Component 2, various reform policies are envisaged 
to promote the use of collective and multimodal transport. These include planned investments in 
the  purchase  of  electric  buses  and  other  investment  to  promote  alternative  modes  of  transport, 
notably the building of the new ferry-landing site with electric charging infrastructure, and which 

70 

 
 
is to be served by electric buses. These reforms and investments together are expected to foster 
the circular economy and climate neutrality. 

Important  reforms  address  existing  institutional  bottlenecks  to  improve  the  overall 
governance framework. There are reforms aiming to improve the justice system, to strengthen 
the  anticorruption  framework  and  to  tackle  money  laundering  and  taxation  issues  under 
Component  6.  Measures  to  remedy  the  fragmentation  of  the  institutional  framework  in  the 
buildings sector and of the waste collection system are included under Component 1. Similarly, 
the adoption and implementation of the Sustainable Urban Mobility Plan for the Valletta Region, 
under Component 2, should help cooperation across different policy areas, across different levels 
of  government,  and  with  local  residents  and  other  major  stakeholders.  Component  3  aims  to 
strengthen the national policy framework for the digital transition, while Component 5 provides 
for the implementation of a new education policy monitoring system. Overall, the recovery and 
resilience plan is expected to improve the governance framework and create the basis for more 
transparent and effective policymaking that will be conducive to, among other things, improved 
competitiveness and innovation.  

The  plan  does  not  present  inconsistencies  or  contradictions  between  the  different 
components.  It  does  present  a  balanced  approach  between  reforms  and  investment.  Due 
care was given to ensure that implementation timelines of reforms and investments are aligned to 
ensure successful delivery of the measures.  

In  order  to  promote  wider  coherence  across  instruments,  notably  with  the  EU  cohesion  policy 
funds, a balanced territorial allocation of resources is encouraged. 

Conclusion on the assessment of criterion 2.11 of Annex V to the RRF Regulation 

Taking into consideration the qualitative assessment of all components of Malta’s recovery and 
resilience  plan,  their  individual  weight  (importance,  relevance,  financial  allocation)  and  their 
interactions,  the  plan  contains  measures  for  the  implementation  of  reforms  and  public 
investments which, to a high extent, represent coherent actions. This would warrant a rating of A 
under the assessment criterion 2.11 of Annex V to the RRF Regulation. 

71 

 
 
 
 
 
ANNEX 

Table 8: Climate and Digital Tagging Table33 

Measure/Sub-
measure ID 

Measure/Sub-measure name 

Budget 
(EUR 
m) 

Climate 

Digital 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

C1.I.1 (a) 

C1.I.1 (b) 

C1.I.1 (c) 

C1.I.2 

C1.I.3 (a) 

C1.I.3 (b) 

Investment  in  the  renovation 
and  greening  of  public  and 
buildings, 
private 
sector 
retrofitting, 
including  deep 
through  energy  and  resource 
efficiency  measures 
-  EE 
public sub-measure 
Investment  in  the  renovation 
and  greening  of  public  and 
buildings, 
sector 
private 
retrofitting 
deep 
including 
through  energy  and  resource 
efficiency  measures 
-  EE 
private sector sub-measure 
Investment  in  the  renovation 
and  greening  of  public  and 
buildings, 
sector 
private 
including 
retrofitting 
deep 
through  energy  and  resource 
efficiency  measures  -  RES 
sub-measure 
Investment  in  the  renovation 
and  deep  retrofitting  of  public 
hospitals 
Investment  in  the  renovation, 
deep retrofitting and renewable 
energy  in  public  schools  -  EE 
sub measure 
Investment  in  the  renovation, 
deep retrofitting and renewable 
energy in public schools - RES 

9,6 

026bi
s 

100% 

19,3 

024ter  100% 

1,1 

029 

100% 

20 

9,6 

026bi
s 

026bi
s 

100% 

100% 

0,4 

029 

100% 

33 While the total cost of Malta’s recovery and resilience plan exceeds the total allocation of non-repayable financial 
support  to  Malta,  Malta  will  ensure  that  all  spending  related  to  the  investments  mentioned  in  this  table  as 
contributing  to  climate  and  digital  objectives  are  fully  financed  by  the  funds  from  the  Recovery  and  Resilience 
Facility.  

72 

 
 
  
  
  
  
  
  
 
 
 
 
 
 
                                                           
Measure/Sub-
measure ID 

Measure/Sub-measure name 

Budget 
(EUR 
m) 

Climate 

Digital 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

sub measure 

Investment  in  the  construction 
of  a  pilot  near  carbon-neutral 
school  to  serve  as  a model  for 
the future and provide a future-
proof  learning  experience  to 
students - EE sub measure 
Investment  in  the  construction 
of  a  pilot  near  carbon-neutral 
school  to  serve  as  a model  for 
the future and provide a future-
proof  learning  experience  to 
students - RES sub measure 

C1.I.4 (a) 

C1.I.4 (b) 

14,4 

025ter  40% 

0,5 

029 

100% 

C1.I.5 

Renewable energy investments 
in roads and public spaces 

3 

029 

100% 

C2. I.1 (a) 

C2. I.1 (b) 

New  ferry  landing  place  to 
promote  alternative  modes  of 
transport at Buġibba, St Paul’s 
Bay  -  port  infrastructure  sub-
measure 
New  ferry  landing  place  to 
promote  alternative  modes  of 
transport at Buġibba, St Paul’s 
Bay 
fuel 
infrastructure sub-measure 

alternative 

- 

15,9 

081bi
s 

40% 

0,2 

077 

100% 

73 

 
 
 
 
  
  
  
  
 
 
 
 
Measure/Sub-
measure ID 

Measure/Sub-measure name 

Budget 
(EUR 
m) 

Climate 

Digital 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

C2.I.2 

C2.I.3 

C2.I.4 

C3.I.1 (a) 

Enhancing 
the  uptake  of 
electric  vehicles  in  the  private 
sector 

50,3 

n/a34 

100% 

Decarbonising 
sector fleet  

the 

public 

10 

n/a35 

100% 

Part  replacement  of  the  public 
transport fleet 

34 

074 

100% 

Strengthening 
the  resilience, 
security  and  efficiency  of  the 
government  digital  backbone 
and  investing  in  appropriate 
digital  solutions,  devices  and 
enable 
tools 
that  will 
provide 
Government 
proactive 
secure 
streamlined 
services 
operations  to  citizens  and  the 
business  sector  -  capital  costs 
sub-measure 

to 
action, 

and 

14,1 

011 

100% 

34   The ‘Methodology for climate tracking’ annexed to the Recovery and Resilience Facility Regulation does not set 
out intervention fields that would enable climate or environmental tracking of electric vehicles or plug-in hybrid 
vehicles, except for vehicles for urban transport falling under intervention field 074. In accordance with Article 
18(4)(e) of the Regulation, the  methodology should however ‘be used accordingly  for measures that cannot be 
directly assigned to an intervention field listed in Annex VI’. In this context, the Commission has applied a 100% 
climate  contribution  coefficient  for  zero-emission  vehicles  of  all  categories  (this  includes  battery,  electric,  and 
fuel  cell/hydrogen-powered  vehicles);  a  40%  climate  contribution  coefficient  for  plug-in  hybrid  light-duty 
vehicles;  and,  in  line  with  the  criteria  under  the  Taxonomy  Regulation,  a  100%  climate  coefficient  for  low-
emission heavy-duty vehicles. 

35   The ‘Methodology for climate tracking’ annexed to the Recovery and Resilience Facility Regulation does not set 
out intervention fields that would enable climate or environmental tracking of electric vehicles or plug-in hybrid 
vehicles,  except  for  vehicles  for  urban  transport  falling  under  intervention  field  074.  According  to  Article 
18(4)(e) of the Regulation, the  methodology should however ‘be used accordingly  for measures that cannot be 
directly assigned to an intervention field listed in Annex VI’. In this context, the Commission has applied a 100% 
climate contribution coefficient for zero-emission vehicles of all categories (this includes battery electric and fuel 
cell/hydrogen-powered  vehicles);  a  40%  climate  contribution  coefficient  for  plug-in  hybrid  light-duty  vehicles; 
and, in line with the criteria under the Taxonomy Regulation, a 100% climate coefficient for low-emission heavy-
duty vehicles. 

74 

 
 
 
 
 
 
 
 
 
 
                                                           
Measure/Sub-
measure ID 

Measure/Sub-measure name 

Budget 
(EUR 
m) 

Climate 

Digital 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

and 

digitalisation 

to 
action, 

the  resilience, 
Strengthening 
security  and  efficiency  of  the 
government  digital  backbone 
and  investing  in  appropriate 
digital  solutions,  devices  and 
enable 
tools 
that  will 
provide 
Government 
secure 
proactive 
services 
streamlined 
operations  to  citizens  and  the 
business  sector  -  training  sub-
measure 
The  digitalisation  of 
the 
Merchant Shipping Directorate 
within  Transport  Malta,  thus 
providing  a  more  efficient 
regulatory service to operators 
Further 
and 
modernisation  of  the  public 
including 
administration, 
intra-facing 
public 
and 
several 
through 
services, 
solutions to improve the front-
end  customer  experience,  data 
sharing  and 
reuse,  virtual 
transfer 
desktops,  property 
processes,  National  Single 
for  customs  and 
Window 
remote-
digital 
working solutions 
Rolling 
to 
intensify  the  digitalisation  of 
the private sector 
Enhancing the resilience of the 
through 
health 
system 
new 
digitalisation 
technologies 

out  measures 

tools 

and 

for 

2,6 

108 

100% 

5,9 

084 

100% 

17,7 

011 

100% 

15 

15,5 

010 

100% 

095 

100% 

011quat
er 

100% 

C3.I.1 (b) 

C3.I.2 

C3.I.3 

C3.I.4 

C.4.I.2 

C6.I.1 

Digitalisation 
system 

in 

the 

justice 

10 

Int. Field = intervention field 

75 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coeff.  =  Coefficient  for  the  calculation  of  support  to  climate  change  objectives  and  to  digital 
transition, on the basis of Annex VI and Annex VII to the RRF Regulation. 

76