Author: SME Chamber

GRTU Council Member Ms Joan Haber, President of the Crafts
Sector, and Executive Abigail Mamo have this week attended the official launch
of the youth guarantee in Malta. It is aimed that the initiative will reach
2000 Youths especially those referred to as NEETs (not in education and
employment) and youths that risk falling into this definition.

As part of the extended scheme, revision classes for those students who get low grades in
their O'Levels for the core subjects (Maths, English, Physics and Maltese) will
be provided free of charge during the summer months.  In a similar scheme,
students at MCAST who didn't succeed their May/June examinations will also be given revision classes. The scope
of these initiatives is to make sure that no youths drop out early, which would
leave them without the necessary skills to find good employment later on.

The Ministry
for Education and Employment, together with Jobs+, will also be embarking on an extension of the 'Alternative
Learning  Programme', which will provide additional training in ICT and soft skills – crucial attributes in order
to find quality employment.

Employers play a very important role in providing not only
job opportunities but also work exposure and support employment related schemes
issued by the authorities. In an intervention Ms Haber said that we welcomed
the many initiatives being launched and that Government should also think of a
scheme to encourage youths to also invest time in their hobbies as these many
often could lead to the generation of new enterprises.

Addressing the conference, Prime Minister Joseph
Muscat and Minister for Education and Employment Evarist Bartolo
both said that although the youth unemployment rate in Malta remains low
when compared to our European
counterparts, those young people who can contribute to the country are
still rejected by a rigid
educational system. Government will be delivering the Youth Guarantee
through a dual approach – the preventive approach which will identify at
an
early stage those youth potentially at risk of becoming early school
leavers,
before they actually leave school; and the reactive response which will
address
those youths who are already not engaged in education, employment or
training. Dr.Muscat added that the country wants to ensure that young
people rejected by the system
find the support they need to regain positive energy and ambition to
move
forward.

Last week MCESD met the Opposition at the PN headquarters and
the meeting discussed a variety of issues. Amongst others the opposition
expressed its concerns on the increase in unemployed. Opposition leader Simon
Busuttil emphasized that it is essential that new jobs are created and the
unemployment level is decreased. The Opposition leader also referred to the
increase in Government debt and asked social partners to analyze this issue.

GRTU has been arguing for years that the banks impose
exorbitant charges and interest rates. This has been confirmed by the Governor
of the Central Bank himself just two weeks ago who emphasized that lending
rates in Malta are amongst the very highest in the Euro Area and so are bank
charges.

It has also been confirmed by the European Commission that is
regulating on what they call the Multilateral Interchange Fees (MIFs) which
refer to fees that are hidden, which are paid without knowing exactly what they
cover and fees which the bank imposes for a service you are neither using nor
need.

These are arguments and actions made by institutions
that hold the highest standing. GRTU has documents in hand supplied by none
other than its own members that show that interest rates commonly vary between
5% and 7%. The fact that bank interest rates and charges are high is undeniable
and this is why the debate on the subject has geared up. This in not just a
national debate, it is a debate that has been going on both in the EU and
Global level to which Malta is finally catching up to and there is no turning
back.

Malta's banking sector has been praised even by GRTU
for not committing the mistakes other banks made. In any case however the
Maltese Government would have been there to support the local banks should they
have found themselves in difficulty as was the case in other countries. This is
much more than any small business could ever aspire for should it be in
difficulty. The crises in the EU financial sector revealed the cruel and
catastrophic domino effect we must by all means possible try to avoid in the
future. The banking sector and with it the financial system stopped working. As
a result businesses stopped and employment stopped. Difficulties in the
financial sector have proven therefore to have devastating effects on the
country's socio and economic stability which in turn also affects other
countries.

The European Commission's programme for the banking
sector was set up to protect the EU citizens, businesses, Governments and the
financial sector itself. The plan which is already being enacted aims to
ameliorate the fitness of banks and putting in place a backup plan, should a
crisis occur, which does not involve putting in jeopardy citizens, businesses
and Governments. This is the stability we should aim for not safeguarding the
banks' interests at the expense of everyone else.

Banks must be paid their fair share and nothing else.
The risk they take for providing loans is accurately calculated with the
Government having to intervene to make a guarantee should the banks not find
the collateral provided by the business sufficient. What about the risk the
enterprise owner takes when taking out a loan with a bank? A startup risks not
only losing any starting capital he had but also his  

own house which is home to his family if things do not
go well and he cannot pay up! The percentage of defaulters in Malta is very low
and banks announce millions of Euros in profit on a yearly basis after having
taken precautionary measures towards defaulters. So yes we can easily say that
the risk is very well calculated.

The bottom line is that today Maltese businesses
compete not only with Maltese companies but also with foreign companies and the
interest rate of the loans they take out impinges heavily on their
competitiveness. How can a Maltese enterprise taking out a loan at 6% compete
with foreign enterprises taking loans at under 3%. It is not an issue of
Government control. If banks lending interest rates and charges are excessive
and impinging on the competitiveness of our enterprises and our country, then
yes, they need to be regulated. This based, of course, on evidence found by
competent authorities. We are therefore very pleased the MCCAA is taking action.
GRTU has already held a meeting on the subject with the authority and we are
informed work is underway.

If this is now an issue that is being taken up
seriously and is an issue of public debate it is only thanks to GRTU that has
relentlessly continued to represent the interest of its members. GRTU squarely
and solely stands behind the interest of its members which are micro, small and
medium enterprises. We stand behind no one else. While GRTU has collaborated
with local banks only for the benefit of its members, GRTU is not linked
financially to the banks. This is GRTU's clear and transparent position.

In a report published on gender equality, findings show that the
European Commission has continued to take action to improve equality between
women and men, including to close the gender gaps in employment, pay and
pensions gaps, to combat violence and to promote equality in decision-making.

The report reveals that gender gaps have significantly shrunk in recent years
but that progress is uneven among the Member States and gender gaps continue to
exist in different areas – to the detriment of Europe's economy. Vice-President
Reding said: "Europe has been promoting gender equality since 1957 – it is
part of the European Union's ‘DNA’. And the economic crisis has not changed our
DNA. For us Europeans gender quality is not an 'option', it is not a 'luxury',
it is an imperative. I am convinced that together we can also close the
remaining gaps in pay, employment and decision-making jobs."

Therefore
you are invited to a Consultation Session entitled "The Transatlantic Trade and
Investment Partnership – Making Trade work for you" on 

Date:
Tuesday, April 29, 2014

Time: 2
pm till 4 pm

Venue:
Europe House, 254 St Paul's Street, Valletta.

Proceedings
will be as follows:

2
pm                Registration

2:15
pm           Presentation
by Mr Iman Schembri (Director General, Economic Policy Department) and Mr David
Sammut (Director, International Economics Relations, Economic Policy
Department) from the Ministry for Finance.

3
pm                Question
& Answer time

All
those wishing to participate are kindly requested to register at:
by Monday, April 28.

What's Happening? At the
moment the Committee on National Alcohol Policy and Action (CNAPA) are drafting
an action plan targeting binge drinking, enforcement of restrictions on
availability for youth, limiting exposure of youth to alcohol marketing and
advertising, ensuring a healthy and safe environment for children and young
people and monitoring and increased research.

Background

Alcohol
is one of the world's top three priority public health areas. Even though only
half the global population drinks alcohol, it is the world's third leading
cause of ill health and premature death, after low birth weight and unsafe sex
(for which alcohol is a risk factor), and greater than tobacco. In Europe,
alcohol is also the third leading risk factor for disease and mortality after
tobacco and high blood pressure.

The
European Union (EU) is the region with the highest alcohol consumption in the
world: in 2009, average adult (aged 15+ years) alcohol consumption in the EU
was 12.5 litres of pure alcohol – 27g of pure alcohol or nearly three drinks a
day, more than double the world average. Although there are many individual
country differences, alcohol consumption in the EU as a whole has continued at
a stable level over the past decade. Alcohol is a cause of no communicable
diseases, including cancers, cardiovascular diseases and liver diseases;
communicable diseases, increasing the risks of HIV/AIDS, tuberculosis and
community-acquired pneumonia; and all types of intentional and unintentional
injury, including homicides and suicides. Alcohol harms people other than the
drinker, whether through violence on the street, domestic violence in the
family, or simply using government resources, notably through the costs of providing
health care, unemployment and incapacity benefits, and dealing with crime and
disorder.

What is being proposed?

Minimum Unit
Pricing – a standard rate for a MUP per gram of alcohol.

Evening hours watershed for TV and
Radio.

Cinema – ban unless film is for over
18s

Outdoor media – restrictions

Print media – restrictions

Regulation of advertising content

Regulation of sport sponsorship

Health advice and warnings (including
pregnancy) on all alcohol drink containers and on promotional materials

Display of grams of pure alcohol

Display calorie count

Malta compared to the rest of the EU

The overall
volume of consumption has traditionally been high in the EU, except for Cyprus
and Malta showing also a relatively lowest burden of alcohol-attributable
mortality.

Countries that
joined the EU in 2004, and later countries such as Bulgaria and Romania, had to
increase their alcohol excise duty rates considerably before or when they
joined the EU.

In almost all
new EU member states since 2003, the nominal and real values of alcohol excise
duty rates increased between 2004 and 2010. The exceptions are Cyprus, with a
constant nominal rate, and Malta, with a constant excise duty rate for beer and
a 50% decrease for distilled spirits. Despite increases in alcohol excise duty
rates in the new EU member states, the lowest excise duty rates were still
found among them in 2011, Bulgaria and Romania being the clearest examples. Low
excise duty rates for beer can also be found among the older member states.

At the end of
2010, all but three countries had established a maximum legal BAC level of 0.5
g/litre or below for general population drivers, with four countries adopting a
zero tolerance level . Towards the end of 2011, Ireland reduced its maximum
permitted BAC level from 0.8 g/litre to 0.5 g/litre for general population
drivers. This left only Malta and the United Kingdom with a level of 0.8
g/litre.

Conclusion

Alcohol is not
just a health issue; it is also a vital issue for the economy and for
productivity. At times of economic downturns, the two conditions for which
death rates jump up are suicides and 
alcohol use disorders. A more than 3% increase in unemployment in the EU
is associated with a staggering 28% increase in deaths from alcohol use
disorders. Many studies have estimated the economic burden that alcohol imposes
on society. The cost comes to as much as 2-3% of GDP, over €300 per citizen per
year; and between half and two thirds of these social costs are due to  lost productivity. If the costs to people
other than the drinker are included, this cost would probably double.  The EU faces an urgent need to reduce the
burden of alcohol, not only to improve the health and well-being of its
citizens but also to strengthen the economic sustainability and productivity of
the Union as a whole.

The date of the
next meeting of CNAPA will be 17-18 June.

Article by Gayle Lynn Callus –
University student reading a Bachelors Degree in European Studies

GRTU Deputy
President Philip Fenech attended last week a high level meeting that discussed
how we can facilitate tourism to the Mediterranean, specifically through the EU
visa policy. It is estimated that 21% of potential tourists refrain from going
to the EU because of visa requirements. 

For Mediterranean Member States tourism is very important. The Mediterranean
is the world's most visited region with one third of international arrivals
opting for destinations within this region. 22% of global international
arrivals choose one of the nine EU Mediterranean Member States who have met
here today.

Yet
there is still the objective for increased flows through facilitating visa
procedures whilst ensuring security. Aware of the growing importance of tourism
for Europe, including tourism from third countries, the European Commission
examined the policy on visas and external border crossings, carried out intense
consultation and very recently issued a proposal for a revised visa code and a
touring visa with a view to facilitating tourism flows. This dossier is
certainly an important one for Malta, and for the other Mediterranean EU Member
States, for security reasons but also in view of the importance to tourism for
our economy and its potential to contribute to facilitating tourism flows to
our Mediterranean countries.

In terms
of tourism performance, we have had a series of successful years due to the
policy and strategy Malta is adopting, ensuring accessibility and seat
capacity, tapping all distribution channels, working with tour operators,
strengthening our tourism product and supporting and working with tourism
operators and other stakeholders. In 2013, 1.58 million international tourists
visited Malta. About 4% of these were generated from source markets requiring a
visa, including China, Ukraine and Russia – markets which certainly offer
greater potential for us in Malta but certainly also for all other
Mediterranean EU Member States for who tourism acts as an economic pillar. As a
government we want to strengthen our promotional efforts in these source
markets, efforts which need to be complemented by a supporting visa policy.

A new evaluation
that was published confirms that the smaller a firm, the larger the
likelihood that its credit application might be declined by a financial
institution. In particular, smaller companies are struggling to obtain feedback
from banks on their declined credit applications even if they have the right to
ask for it.

To help them eventually to obtain loans successfully, smaller firms
need to receive and act on feedback about areas in which their loan application
was lacking. Research results indicate that clear benefits would derive for
SMEs from obtaining such feedback: about half of SME respondents to the survey
found the feedback received by banks useful as regards obtaining future
funding. Therefore the evaluation recommends reviving the dialogue between
banks and SMEs, by increasing transparency and making efforts to improve
financial literacy in smaller companies. As small and medium sized
enterprises (SMEs) are an engine of growth in the EU economy, access to credit
is crucial both to their survival and that of our economy.

Recommendations of the evaluation

Research results indicate that SMEs would derive clear
benefits from obtaining feedback on their loan applications: about half of SME
respondents to a survey found the feedback received by banks useful as regards
obtaining future funding.

But it is exactly at the smaller end of the market where
there may be issues in obtaining feedback, where SMEs are often scored by the
banks using large data pools and the economics of the situation sometimes do
not support detailed and intense discussions between bank officials and SME
representatives.

To tackle the issues reported in the findings, the evaluation
recommends the revival of dialogue on transparency between banks and
representatives of SMEs, to raise awareness of enterprises as regards their
rights to obtain feedback and to develop an agreed standard of feedback to
SMEs.

DG Taxud has
launched a public consultation on "tax problems faced by EU citizens when
active across borders within the EU". Although the consultation is mainly
addressed to citizens, some aspects like barriers related to taxation of
e-commerce activities can also affect companies.

The
consultation is available on the http://ec.europa.eu/taxation_customs/common/consultations/tax/2014-04_cross_borders_en.htm

If you wish to participate, it is recommend to use the MS Word version
of the questionnaire and send your answer both to the European Commission
() and to EuroCommerce
(). The deadline for your response is Friday, 3 July 2014.