Author: SME Chamber

The Lotto
Receivers Union (LRU), represented by GRTU within a specific lotto receivers
section, has this week written to the Chairman and CEO of the Lotteries and
Gaming Authorities (LGA) regarding the issue of retail outlets of various
natures selling games of the like of Scratchers, Keno, Bingo, and National
Lottery tickets.

The LRU pointed out that to them this constitutes unfair
competition and appears to be illegal, quoting Article 8 (1) of the Lotteries
and Other Games Act: "….any person who offers for sale or sells any game to a
person under the age of eighteen years of age shall be guilty of an offence."

To the
knowledge of the LRU there is no enforcement in place to address issues that
arise from other outlets as there is in their regards. In addition to this
whilst the LGA is allowing the current National Lottery Licence holder to offer
these games in any outlet, allowing freer access to all, the agency agreement
of the lotto receivers precludes them from offering games and services other
than those of the National Lottery Licence holder, in itself a very restrictive
and questionable condition.

The LRU
has asked on what criteria are outlets being allowed to sell games that are
part of the licensee's monopoly and the LRU was always given the impression
that these could be sold only through the lotto receivers/agents points of
sale. The LRU feels that this could also constitute a manoeuvre around the Call
for Tenders which established a maximum number of 240 outlets for gaming.

It
should be pointed out that lotto receiving outlets are only allowed to
sell  Lotto and Super5 which limits them
heavily, even more so since the other outlets are also being allowed to cash
all games including lotto and super5.

The LRU
have called on the LGA to take immediate steps to ensure the law is enforced in
a horizontal manner and that a level playing field is maintained in a market
which has already become too difficult and onerous to work in.

Following an
invitation and visit to Malta by a delegation from the Romanian Chamber of
Commerce and Industry of ILFOV earlier this year, GRTU President Mr Paul Abela
and GRTU official Mr Noel Gauci have visited the Romanian Chamber of Commerce
at its headquarters in Bucharest.

A memorandum of understanding for increased
cooperation between the Presidents Mr Paul Abela and Mr Dan Dumitru has been
signed in the presence of the Romanian Secretary of State Dr Iulian Moisescu.

The MOU
paves the way to boost the business between the members of the respective
chambers in various sectors including tourism, general trade and investment. It
was also agreed that the two parties will collaborate in tapping EU funds
collectively and effectively. Maltese GRTU members and Romanian Chamber of
Commerce members will be treated as members of the respective organizations
when visiting Malta or Romania respectively.

The
Romanian Chamber of Commerce have appointed Mr Thomas Molendini as their
permanent representative in Malta.

PORT-PVEV –
Photo Voltaic Electric Vehicle was launched on the 29th of November 2013 by
the  Minister for Transport and
Infrastructure Hon Joe Mizzi during a Conference of the project entitled 'Electro-mobility
Islands'

Hon
Mizzi said that the aim of government is to work towards making transport in
Malta environmentally sustainable.  Hon
Mizzi referred to the latest national greenhouse gas inventory, road transport
which currently accounts to 16.9% of the total greenhouse gas emissions
generated in Malta, as unacceptable.

The
scope of the project is to determine how to make ports and port-areas cleaner,
whilst also making them more energy-efficient. The fact that these electric
vehicles do not emit any harmful pollutants means that the deployment of these
cars on our roads will improve air quality by the removal of traffic related
emissions and will also reduce noise pollution.        

This project will also propose additional future measures of how to make
ports in Malta and Sicily cleaner by engaging electro-mobility together with
the generation and use of renewable sources of energy to provide different
forms of clean transportation.

Government
decided to support this initiative because of the 2020 climate change and
energy targets that Malta needs to achieve.

Hon
Mizzi said government is planning that by the year 2020, there would be no less
than 5,000 electric vehicles on the Maltese roads, together with mandatory
targets for the respective infrastructure. Government will also be launching
three other initiatives to show its commitment towards electro-mobility and
environmental sustainability.

A joint
initiative between the Ministry of Transport and Transport Malta will be
launching the Malta National Electro-mobility Action Platform, besides the
promotion of electro-mobility in Malta, the role of the MNEP will be to oversee
the implementation of the Action Plan which is made up of various projects and
initiatives that will further the electrification of transport.

The
government will also be incentivising the uptake of battery electric vehicles
by giving a substantial grant of €5,000 for the purchase of a battery electric
vehicle. This measure will enter into effect as from January 2014 and the
grants will be given on a first come first served basis.

This
scheme will be part of the scrappage scheme which was announced in the Budget
for 2014.

Hon
Mizzi also said that as from next year, the government will embark upon a
gradual process of changing its current vehicle fleet to a much cleaner and
energy-efficient one.

GRTU Deputy
President Philip Fenech has attended a consultation session organized by MEUSAC
on the ‘Proposal on interchange fees for card-based payment transactions'
and  the ‘Proposal on the comparability
of fees related to payment accounts, payment account switching and access to
payment accounts with basic features'.

The
continued development of the single market in the area of financial services is
of primary importance for Europe's growth and competitiveness. However
obstacles to a fully integrated internal market for financial services remain.
In the field of retail financial services, The Single Market Act I (SMA I)
stated that particular regard should be given, "to the transparency of
bank fees and better protection of borrowers in the mortgage market1". The
Commission also announced, "an initiative concerning access to a basic
payment account for all citizens at a reasonable cost, wherever they live in the
EU" in order to enable all citizens to participate actively in the single
market.

Previous
initiatives in the field of retail banking have not only improved the ability
of payment service providers to operate cross-border, but have brought
substantial benefits to many European consumers, in particular through cheaper
transactions, faster payments and more transparent conditions and prices. The
Payment Services Directive (2007/64/EC) provides certain transparency
obligations with respect to the fees charged by payment service providers. This
initiative has contributed to substantially shorten the time required to
execute transactions and increase the consistency of the information provided
to consumers in relation to their payment services.

While
measures to complete the single market for financial services should generate
growth and enhance business opportunities for providers of financial services,
their impact on consumers is also of vital importance. At present, the opacity
of payment account fees makes it difficult for consumers to make informed
choices. Even where fees are comparable, the process for switching from one
payment account to another is often lengthy and complex. As a result, consumers
still show a very high degree of inertia with respect to payment accounts.

The
proposals aim to: improve the transparency and comparability of fee information
relating to payment accounts; facilitate switching between payment accounts;
eliminate discrimination based on residency with respect to payment accounts;
and provide access to a payment account with basic features within the EU. They
will contribute to easier market entry, increased economies of scale and
therefore increased competition in the banking and payment industries, both
within and across Member States. Taking steps to simplify the comparison of
services and fees offered by payment services providers and facilitate the
process of switching between payment accounts will, in turn, improve prices and
services for consumers. This proposal will also guarantee access to basic
payment services to all EU consumers and prohibit discrimination based on
residency against consumers who intend to open a payment account abroad, to the
benefit of both payment service providers and consumers.

GRTU, in
line with the position taken by EuroCommerce, has long been calling for more
transparency and competition in the payments market. We welcome the package of
proposed payments legislation announced on 24 July 2013 but we feel that
current proposals do not go far enough.

In
Europe, millions of businesses accept millions of payment transactions each
day. For these companies, large and small, payments are an essential part of
their business, and the fees charged (multilateral interchange fees – MIFs) can
contribute significantly to their operating costs. On their behalf, we call for
the full potential of the Single European Payments Area (SEPA) to provide
low-cost payments across Europe to be realised. A reduction in the cost of
payments will allow European payment users to adopt innovative payment
solutions and realise cost savings that will benefit consumers.

Philip
Fenech put foreword a joint statement by EU level representatives of payment
users, amongst which EuroCommerce and UEAPME, that suggest the below
amendments:

1.   Debit: Provide an interchange-free electronic debit service for all
citizens by mandating the removal of the interchange fee on consumer debit
cards. As an alternative, any fee should be set as a maximum fixed cap in line
with current best practice at national level.

2.   Credit: Lower the proposed caps for electronic credit
cards/applications. This cap should be lowered proportionately in line with
lowered debit caps.

3. Commercial cards: Include
commercial payment cards/applications within the scope of the proposed fee caps.
The current proposal to exempt commercial cards from caps is unjustified
economically and risks creating loopholes. Distinguishing commercial cards from
consumer cards will also give rise to significant technical and practical
problems.

4.   Three-party schemes: Mandate a mechanism to include consumer and
commercial cards issued by three-party schemes within the fee caps.

5.   Implement the Regulation immediately. Cross-border caps should
begin within 2 months of adoption of the Regulation and national caps within 6
months, with a year as absolute maximum. The proposed two year deadline for
national implementation is not technically necessary and would adversely affect
mainly SMEs and consumers since the greatest burden of interchange fees is felt
at national level.

Confirms undertaking with Chinese solar panel exporters – The European
Council has this week backed the Commission's proposals to impose definitive
anti-dumping and anti-subsidy measures on imports of solar panels from China.
In parallel, the Commission confirmed its Decision accepting the undertaking
with Chinese solar panel exporters applied since the beginning of August.

The
Council confirmed the level of the duty for those Chinese exporters of solar
panels who cooperated with the investigations. The duties stay unchanged at an
average of 47.7% and will apply for two years as of 6 December 2013.    

The imposition of definitive measures needs to be seen in the context of
the amicable solution reached with China which resulted in the undertaking.
This undertaking, applied as part of the anti-dumping proceedings, is now
confirmed and has been extended to the anti-subsidy proceeding. Hence, the
final anti-dumping and anti-subsidy duty rates will apply only to those exports
from China which do not meet the conditions set out in the undertaking. Those
Chinese exporters that participate in the undertaking are exempt from paying
the anti-dumping and anti-subsidy duties.

Background

The
decisions came after a fifteen-month investigation for the anti-dumping case
and thirteen month investigation for the anti-subsidy case, launched in
September 2012 and November 2012 respectively. During these investigations the
Commission found that Chinese companies were selling solar panels in Europe at
far below their normal market prices and were receiving illegal subsidies,
causing significant harm to EU solar panel producers.

On the investigations

Following
complaints lodged by the industry, the European Commission conducted two
parallel investigations concerning imports of solar panels from China, an
anti-dumping investigation and an anti-subsidy investigation.

On 5
June 2013, the Commission imposed provisional measures in the anti-dumping
case, averaging 47.7%. On 2 August 2013 the Commission accepted an undertaking
offered by the majority of Chinese solar panel exporters.

The
Commission reached its definitive conclusions on the solar panels anti-dumping
and anti-subsidy investigations and, after consulting Member States, made a
proposal to the Council to impose definitive anti-dumping and anti-subsidy
measures for a period of two years.

In
parallel, the decision accepting the undertaking has been confirmed and
updated, among other things to include the anti-subsidy case in the undertaking
and to extend it to some additional companies. Roughly 75% of Chinese solar
panel exports to the EU are now covered by the undertaking and are hence not
subject to any anti-dumping or anti-subsidy duties.

The
Commission took the final decision on the undertaking with a view to it
entering into force on the same day as the anti-dumping and anti-subsidy
measures, on 6 December.

On the decision

According
to this decision, the following duty rates apply to Chinese solar panel
exporters that do not participate in the price undertaking:

–   The average duty for exporters that cooperated in the investigation
is 47.7%, which is the duty rate applicable to the majority of exporters.

–   A duty of 64.9% will be applied to those exporters who did not
cooperate in the European Commission's investigation, which are estimated to
account for less than 20% of exports.

–   The duties are composed of an anti-dumping and an anti-subsidy duty
of the following rates:

Definitive
anti-dumping duties will range from 27.3% to 64.9% for cooperating parties in
the investigation, with a residual anti-dumping duty of 53.4% for
non-cooperating companies in the investigation.

Definitive
anti-subsidy duties will range from 0% (Delsolar) and 3.5% to 11.5% for
cooperating companies in the investigation, with a residual anti-subsidy duty
of 11.5% for non-cooperating companies in the investigation.

The
duties, combined with the undertaking, are expected to stop the downward spiral
of prices on solar panels. Green sustainable development is only possible with
sustainable industries. In this respect, stabilized prices are important not
only for current production, but future investment decisions too. More
information:

http://europa.eu/rapid/press-release_IP-13-1190_en.htm

In the yearly
report published by the European Commission DG Enterprise, the 2013 Small
Business Act Fact Sheet for Malta, it is very evident that while SMEs in Malta
have struggled to advance, the public administration up till the first 3 months
of 2013 has been dragging its feet on the very essential implementation of the
SBA which is 'the EUs flagship initiative to support small and medium sized
enterprises (SMEs)'.

The
report emphasizes that 'more than most other Member States, Malta's economy is
driven by micro-firms', which GRTU feels should be the more reason to implement
the SBA. 'SMEs in Malta provide about 80% of jobs in the business economy and
create 71% of the overall value added, which is 14 percentage points more than
the EU average'. The report carries on to describe Malta as belonging 'to the
very small group of MS that saw their SME sector expand over the past five
years in the number of firms and employees'. It says that 'the performance of
Maltese SMEs since 2008 has been extraordinarily robust' however the report
outlines several policy weaknesses where Malta is scoring below the EU average.
Overall, weaknesses to date have not been a fundamental impediment for the
expansion of Malta's SMEs yet these challenges need to be confronted more forcefully
for the sake of Malta's competitiveness.

GRTU
welcomes a more complete profile analysis for Malta which is a result of
Government's efforts to increase Malta's representation in international
statistics. It was very disappointing however 
to learn that additional indicators did not help to improve Malta's
overall performance.

Malta
scores below the EU average in five – entrepreneurship, second chance, state
aid and public procurement, access to finance and skills and innovation – of
the 10 pillars, some of which were already problematic while others have
dropped below the EU ranking only recently. One of the most important pillars –
think small first – for SMEs could not be calculated due to insufficient data
from Malta.

The report
confirms GRTUs long standing arguments that most existing schemes were
inefficient, unfit for SMEs and not aggressive enough in helping SMEs.

The
report also confirms that 'some measures announced in 2011 for implementation
in 2012 still need to be enacted'. These include very important policy measures
on which GRTU has been insisting since the introduction of the SBA, amongst
which; the legal instrument to institutionalize the SME test and ensure that
new acts cannot come into force before 2 months from official publication,
regular customer satisfaction surveys for public institutions providing
services to SMEs and a guarantee scheme by Government for SME loans.

The
Pillars:

1. Entrepreneurship

Malta
continues to trail the EU average. Rates of entrepreneurship and self-employed
and the preference for self-employed and the perceived feasibility of becoming
self-employed remain below the EU average. GRTU feels one of the main reasons
for this is the challenging business environment in Malta. There was however
some marginal improvement and the traditional attitude seems to be changing at
a slow but steady pace. The Malta Enterprise Create scheme is mentioned here
however we do not know how effective this scheme really was.

2. Second Chance

Here
Malta is once again below the EU average. The fact that the time to close a
business in Malta is long combined with a lower level of support for
entrepreneurs seeking a second chance makes an environment which is difficult
for second starters. This has an impact on entrepreneurship.

Worryingly
no policy instruments were introduced to tackle this weakness.

GRTU had
proposed a specific scheme in this regard as part of its 2014 Budget proposals
which however was in no way introduced.

3. Think Small First

The burden
of Government regulation is just off the EU average. Several of the policies
falling under this pillar have been mentioned but not implemented. This is
particularly relevant for the SME test, which is the basis of the SBA , and on
which nothing has been done yet. The report mentioned that the Maltese
Government here indicated the Enterprise Consultative Council as a success but
as users we feel this is an over statement.

4. Responsive administration

Malta is
in line with the EU average. Start-up conditions are said to be relatively
competitive however our major challenges are of reducing the time to start a
business which stands at 7 days while the EU average is 5 days, the cost of
enforcing contracts and the complex licensing system. The Malta Enterprise
Business First is quoted as the main reason for the good conditions however we
feel that Business First could do much more in terms of outreach and reporting.
Its facilities are utilized only by those that come across it so many still set
up business without using Business First which is both lengthier and costlier.
Not enough promotion is done of the support schemes and stakeholder involvement
in both drafting schemes and promoting them is still limited which leads to low
utilization of certain schemes. GRTU agrees with the report that states that
much more needs to be done to advance the idea of an administration that is
truly responsive to business needs.

5. State Aid and Public Procurement

Malta is
just below the EU average and certain data is very worrying. While SMEs in
Malta appear to have a greater chance to participate in public procurement they
face severe difficulties in benefitting from state aid measures. While in Malta
state aid for SMEs is measured as almost non existent in some countries such as
the UK the figure reaches 18%. This is not surprising to GRTU which has been
concerned and complaining about the low amount of state aid going to SMEs for
years. Something is clearly wrong and the administration does not even
acknowledge the problem. Malta is doing quite well on the share of SMEs using
e-procurement services. This might also be because this is the only way that
tendering for public contracts can be done. The absolute  majority of our member from a wide variety of
sectors however complain that the new e-procurement system which Government is
said to have facilitated is still very complex. It requires them to attend a
course to help them in submitting the tender however it is still difficult and
more time consuming, members report that without the course it would be
hopeless.

6. Access to Finance

On
access to finance Malta scores below the EU average. It is reported that
comparatively SMEs are successful in obtaining loans form banks, which we feel
this is because comparatively Malta was not as affected by the crises and
therefore banks maintained their lending trends. Two indicators describing the
share of EU structural fund financing reserved for SMEs show that Malta is far
below the EU average. Malta's 2.8% is shockingly low when compared to countries
like Denmark and Finland where the share is almost ten times as much. Policy
measures undertaken between end 2012 and beginning 2013 have not addressed
these issues. The BStart scheme is mentioned however we highly doubt the use
and effectiveness of this scheme for SMEs.

7. Single market

Malta's
headline score declined from last year as compared with the EU average. The
indicators measuring exports from MS imports into the single market by
Maltese  shows Malta trailing the EU
average by some distance. In exports in the single market Malta's share is only
a quarter of the EU average, one of the lowest figures of all EU Member States.
Efforts to help SMEs export have to become more effective and result oriented.
This includes schemes such as Gateway to Export and the trade missions
organized by Malta Enterprise.

8. Skills and innovation

Here we
are just below the EU average and the report states that 'Malta has much room
for improvement' especially related to the innovative capacity of SMEs. Another
negative indicator was the percentage of businesses that provided training to
employees which was only 16%. Malta is however in line with the EU average when
it comes to percentage of SMEs carrying out business online. Two schemes are
mentioned, the Commercialisation Programme launched in 2013 which augurs well
but it is too early to measure its effectiveness and the Quality + scheme
implemented in 2012 on which we have not as yet heard success stories.

9. Environment

'This is
an area where Malta trails behind the EU average in many respects'. Few SME
offer green products or services however the situation is better when it comes
to investments in resource efficiency and the number of SMEs that have
benefited from public support for production of green products. More effort is
required in policy measures aimed to address this gap.

10. Internationalisation

Malta is
comfortably within the EU average. A significant gap is once again recorded for
exports, this time outside the EU, however Malta performs well with regards to
the enabling conditions of costs and time for trade. While it can be cheaper
and faster to trade from Malta, there is also more paper work with the
authorities requiring on average two more documents from traders than the EU
standard. To improve overall export performance the report suggests investing
in physical infrastructure and awareness-raising among businesses. Once again
GRTU emphasizes that trade missions and schemes targeted at exports should be
result oriented. One can easily draw the conclusion that the picture is not a
positive one.

We are
concerned that the absolute majority of issues have not been addressed in the
slightest in this year's Budget. GRTU hopes that many of the issues that it had
been flagging for so long will be addressed especially now that they are backed
by the Commission. It is evident that much greater effort is needed from the
side of the administration to really help 
the most important chunk of businesses, SMEs. Policies have to be
effective and result oriented and carried out in close cooperation with SME
representatives, that know the needs of SMEs best.

The euro area
(EA17) seasonally-adjusted unemployment rate was 12.1% in October 2013, down
from 12.2% in September. The EU28 unemployment rate was 10.9%, stable compared
with September. In both zones, rates have risen compared with October 2012,
when they were 11.7% and 10.7% respectively.

These figures are published by
Eurostat, the statistical office of the European Union. In October 2013, 26.654
million men and women were unemployed in the EU28, of whom 19.298 million were
in the euro area. Compared with September 2013, the number of persons
unemployed decreased by 75 000 in the EU28 and by 61 000 in the euro area.
Compared with October 2012, unemployment rose by 512 000 in the EU28 and by 615
000 in the euro area.

Over 10 years
after the introduction of euro banknotes and coins, the Eurosystem – the
European Central Bank (ECB) and the national central banks (NCBs) of the euro
area – will unveil a new Europa series €10 banknote on 13 January 2014 and
issue the note later in the year.

The European
Parliament has voted in favour of the EU's Multiannual Financial Framework
(MFF) for the years 2014 to 2020. Consent by the Parliament on 19 November
clears the way for final approval of the budget by the Council in the coming
weeks.