SME Chamber

· GRTU Director General – Vincent Farrugia pleads for more EU Financial and Technical Assistance

GRTU – Malta Chamber of Small and Medium Enterprises is publishing the comments made by Vincent Farrugia on behalf of the National Executive Council of GRTU at the National Reform Programme Meeting of MCESD with the EU Commission Visiting Delegation of experts from various Directorates General, held yesterday Wednesday 20th July 2005 at the Mediterranean Conference Centre.

GRTU – Malta Chamber of Small and Medium Enterprises is publishing the comments made by Vincent Farrugia on behalf of the National Executive Council of GRTU at the National Reform Programme Meeting of MCESD with the EU Commission Visiting Delegation of experts from various Directorates General, held yesterday Wednesday 20th July 2005 at the Mediterranean Conference Centre.

GRTU Director General Vince Farrugia made a strong plea yesterday to the EU Visiting Delegation of experts working with the Maltese authorities on the National Reform Programme, to help Malta in a much stronger way then hitherto. Without this strong commitment from the EU Commission, Malta cannot become a viable economic part of the EU Internal Market.

Vince Farrugia was intervening during the encounter the EU visiting experts had with the member of the Malta Council for Economic and Social Development. The only item on the agenda was the Maltese National Reform Programme.

Vince Farrugia argued that, Malta, given its size and its limited resources, is not a viable economic entity under normal economic consideration.

“Successive Maltese governments have, however, through sheer ingenuity given Malta a long period of economic stability and viability with steady economic growth, growing national reserves and a full employment that gave the Maltese a reasonable standard of living and quality of life. This was achieved through a successful combination of liberal economic policies and protectionism where needed. The mixed economy in Malta worked successfully well in spite of the inefficiencies and difficulties borne. Malta produced a viable industrial sector, a viable tourism sector and viable fisheries and agriculture sector backed by an efficient banking and financial structure that sustained an internal market capable of supporting thousands of small enterprises that profitably serviced the Maltese economy. Government supported the system through a combination of subsidies and fiscal advantages as well as a direct assistance programme through the provision of factories and infrastructural publicly funded development. This was done without creating undue pressure on public finance.

Every economist of note realized, however, that Malta by the end of the millennium had reached the end of the road as the mixed economy fell under greater and greater economic strain. It was obvious that the practical alternative was the integration of the Maltese economy within the enlarged European Internal Market. The target now is that through rapid reform and innovation Malta succeeds to become a viable integral part of the single market and once again attract a flow of foreign direct investment and a revival of reformed economic enterprises operating on the internal Market.”

Vince Farrugia expresses his full faith that this can be reached in the medium and long term should Malta succeed to execute a National Reform Programme agreed to by all the social partners. “Unfortunately Malta today is passing through a very bad economic phase brought primarily on ourselves through a lack of clearly defined national economic strategy but accentuated by the burdens Maltese enterprises, large, small and micro, have to carry as a result of additional costs imposed through the adoption of the acquis communautaire over a relatively short period of 14 months. Unfortunately this steady flow of induced additional costs is being carried with very little financial and direct technical support from EU Commission and with the private sector constantly at the receiving end of all burdens. The public sector is facing serious organisational and financial difficulties and in an EU organized effort to cause the Maltese government to solve its financial deficit problems by 2007, government is effectively being forced to push enterprise’s back to the wall. The Maltese economy, given the experience of the last 14 months, is showing most clearly that it cannot survive and become a viable economic part of the single market unless it receives massive funding and technical assistance from the EU Commission to help little Malta survive the needed transitional restructuring period. If Malta is to succeed economically it cannot be made to depend on its own limited financial resources. The alternative is a very long period of economic depression and Malta cannot take such a long a period to restructure as the whole process will fail as enterprise will give up and move elsewhere. The EU Commission must support Malta in two specific ways: more financial and technical assistance given the particular problem of economic insufficiencies due to Malta being an Island State within the Union; and a more positive approach towards the imposition of rules and regulations better suited for a large economy rather than for a mini economy the size of Malta.

Asked what he expects as an immediate action of the National Reform Programme, Vince Farrugia answered that Malta should, with the assistance of EU Experts, determine what technical and technological capabilities it requires to functional as a viable entity within the EU Single Market and also measure the technical and technological capabilities that are available to the Maltese economy today, and with the participation of all social partners decide on the guide lines, policies and programmes that need to be implemented across the whole economic and productive sector to close the gap existing between today’s technological and productive capabilities of the Maltese economy and what capabilities the Maltese economy require to become a viable integral part of the EU Internal Market.

Vince Farrugia stressed that it is important that this becomes the strategy of the Reform Programme. He emphasized that it is important that GRTU’s plea for greater recognition by the EU Commission of the problems faced by Maltese enterprise to adopt successfully to the EU norms and regulations do not fall on deaf ears.

The Head of Visiting EU delegation Mr. Gert Jan Koopman, Director Enterprise and Industry Directorate General, assured Mr. Farrugia and the other members of MCESD that the EU Commission has all the funds it requires to support Malta’ National Reform Programme and that it is imperative that the Maltese do their utmost to ensure that the National Reform Programme addresses all the issues being raised and that the Maltese achieve agreement and commitment to the implementation of the National Reform Programme.

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