Author: SME Chamber

Olli Rehn, the European commissioner for economic and monetary affairs and the euro, issued a gloomy forecast about economic performance in the European Union on Friday (11 May) – but he insisted that there could be no alternative to the path of austerity.

The eurozone, where gross domestic product (GDP) is expected to decrease by 0.3%, is in recession and is not expected to start to recover until the second half on this year. The European Commission's spring economic forecast made particularly dismal reading for countries struggling to get their budget deficits under control. For Spain, where the economy is expected to contract by 1.8% in 2012, the Commission predicted “difficult times ahead”. Spain's deficit is now expected to be 6.4% of GDP, a long way above the government's target, agreed with the EU, of 5.3%.

Next year, the Commission predicts it to be barely reduced, at 6.3%, well above what is supposed to be a celing of 3%. The deficits of Greece, Portugal and France are all also likely to be larger than previously forecast. Rehn said that all the predictions were based on the assumption that government policies would not change – and that Spain's outlook could alter once the plans of the country's autonomous regions were confirmed. “The Commission has full confidence in the determination of the Spanish government to meet the fiscal target in line with the [stability and growth] pact,” Rehn said. “For Spain, the key to restoring confidence and growth is to tackle the immediate fiscal and financial challenges with full determination.

This calls for a very firm grip to curb the excessive spending of regional governments.” Luis de Guindos, Spain's economy minister, responded by saying that the country remained committed to the 5.3% target for this year and 3% for 2013. The latest forecasts for the EU and eurozone are worse than those predicted in the last report, in autumn 2011, but Rehn said that this was no reason for governments to stray from their austerity programmes. “We cannot pile debt over debt,” he said. “It is essential that we are continuing fiscal consolidation and in parallel boost growth by targeted investments.”

French challenges

François Hollande, France's president, said that he was aware of the worse-than-forecast deficit figures and blamed the former administration. “I've known for several weeks that there's been a worse deterioration of our public accounts than what the outgoing government has said,” he said on Friday. “Now we have the confirmation, and it's worth looking at and analysing. I will wait for the report from the Cour des Comptes [France's national audit office, expected at the end of June] before taking the necessary decisions.”

GDP is expected to stagnate across the EU as whole this year, contracting by 0.3% in the eurozone. Next year, growth is expected to return: it is forecast at 1.3% in the EU and 1% in the 17 countries of the eurozone. Rehn said that the recovery would be slow and “uneven” across member states. Unemployment is expected to remain at 10% in the EU and 11% in the eurozone, while inflation is forecast to edge down.

“A recovery is in sight,” Rehn said. “But the economic situation remains fragile, with still large disparities across member states.” Rehn said that there was “an ongoing adjustment of the fiscal and structural imbalances built up before and after the onset of the crisis”, and that this had been made worse by continuing weak economic sentiment.

The spring Consumer Scoreboard published this week on the occasion of the European Consumer Summit 2012 shows that in 2011 for the second year running after the fall in 2009 there were improvements in many EU countries. Consumer conditions are measured e.g. by consumer trust in authorities, retailers and consumer organisations, in the safety of products, the effectiveness of solving disputes and satisfaction with handling complaints. The Scoreboard also shows that consumers still cannot shop as easily across borders as they can at home, thereby missing out on greater choice and savings, with potential gains of as much as EUR 204 billion per annum.

John Dalli, Health and Consumer Policy Commissioner, said: "I call on national policymakers and stakeholders to use today's Scoreboard results to build a quality environment for consumers. Only consumers who are aware of their rights and know how to use them can fully exploit the potential of the Single Market to enhance innovation and growth, so it is vital to create the right conditions to harness that power to the benefit of the European economy, consumers and businesses."

The Scoreboard

The Consumer Scoreboard provides evidence and alerts about how the single market is performing for EU consumers in terms of choice, prices and protection of consumer rights. The spring edition ('Consumer Conditions Scoreboard') looks at the integration of the retail market and national conditions for consumers. It includes the Consumer Conditions Index which is calculated based on the quality of regulation concerning consumers and businesses, the effectiveness of resolving disputes and handling complaints, consumer trust in authorities, retailers, advertisers and consumer organisations, and the degree of trust in the safety of products on the market. This data allows Member States to benchmark their performance over time.

The Scoreboard is mainly based on surveys of consumers and retailers, Eurostat data as well as information received from Member States. Key findings Progress in national consumer conditions The 2011 index shows that consumer conditions have improved for the second year running after the fall in 2009. Consumers enjoy best conditions in Luxembourg, UK, Denmark, Austria, Ireland, Finland, the Netherlands, Belgium, Germany, France and Sweden (Member States above the EU average). The e-commerce gap The Scoreboard shows that while e-commerce continues to grow, it remains largely domestic despite the clear potential in terms of choice and savings across borders. Efforts must be stepped up to exploit the full benefits of a truly single digital market. Consumers can be more confident shopping from other EU countries, as their worries about foreign sellers are shown to be largely unfounded and cross -border e-commerce appears to be at least as reliable as domestic e-commerce.

The findings suggest a key role for more effective information about existing cross-border advice, enforcement and redress mechanisms (network of national enforcement authorities, and the European Consumer Centres, which provide free help and advice to consumers shopping in the Single Market). Knowledge of consumer rights worryingly low Many consumers do not know their rights. Only 12% of respondents EU wide could answer questions about their consumer rights in relation to guarantees, cooling- off periods and what to do if they receive goods they never ordered. Many businesses were not aware of their legal obligations towards consumers. For example, only 27% of retailers knew how long consumers have to return defective products.

Unfair commercial practices persist Illegal business practices persist. Since 2010, more EU consumers and retailers have come across advertisements and offers which were misleading and deceptive, or even fraudulent and many more received goods they never ordered. 7 years after the adoption of the Unfair Commercial Practices Directive this is a cause for concern and must be addressed more actively. Authorities must enforce the rules which already exist to protect consumers, particularly vulnerable consumers, against such practices; consumers must be empowered to spot and avoid them; and it must be possible to have faster, easier and cheaper solutions to disputes with traders, both online and offline (see IP/11/1461).

The Commission will look into ways to step up enforcement in order to strengthen consumer confidence in cross-border transactions. This will be set out in a report in 2012 on the implementation of the Unfair Commercial Practices Directive. Looking to the future The new EU Consumer Agenda 2014-2020 aims to empower consumers and build their awareness and confidence by giving them the tools to participate actively in the market, to make it work for them, to exercise their power of choice and to have their rights properly enforced. Once adopted, the proposals currently on the table for mechanisms to solve disputes with traders without having to go to court (Alternative and Online Dispute Resolution – ADR/ODR), will help European consumers to sort out their problems, wherever and however they purchase a product or service in the EU.

Full Scoreboard: http://ec.europa.eu/consumers/strategy/facts_en.htm#5CMS

For more information: http://ec.europa.eu/consumers/consumer_research/editions/cms7_en.htm

Malta Enterprise is inviting businesses wishing to explore business opportunities in Sweden and Denmark to participate in a business and trade delegation to the cities of Stockholm and Copenhagen from the 3 – 8 September 2012.

Eligible enterprises include:

Manufacturers

Service providers

Licensing and Franchising

Companies seeking joint ventures and strategic alliances

Technology Transfer

Companies seeking R&D opportunities

 

Companies seeking to import finished products are NOT eligible.

 

As part of its assistance Malta Enterprise will endeavour to set-up one-to-one meetings for participants through its institutional networks. Malta Enterprise will also refund eligible participants up to 60% of flight costs and a per diem allowance. Refund is for one representative per participating company.

Application forms together with a €250 deposit should be sent to us or forwarded by hand by Friday 1st June, 2012. This deposit will be fully refunded together with the financial assistance referred to above after the event. In cases where a company cancels its participation, any cancellation costs incurred by Malta Enterprise on behalf of the company will be deducted from this deposit. For further information please contact Robert Falzon on 25423239 or

Why did you become an entrepreneur?
I didn't have a choice really, I was put in it, but I enjoy every minute of it.
How have you come to choose your line of business?
It wasn’t my choice really.

Where did you go on your last holiday? The UK to visit my daughter What is your earliest memory? As a young child playing on the beach If you could chose to be someone famous who would you be and why? Pavarotti. He had a passion for what he did for a living.

Some significant legislative measures have been introduced recently under the Employment and Industrial Relations Act which may have an impact on many businesses. Legal Notice 44 of 2012 amended by Legal Notice 110 of 2012 which came into force on 31 January 2012 reviews the employment status of individuals who are self-employed and defines a number of criteria which would indicate the existence of an employment relationship.

 

Employment Status National Standard Order, 2012 The Order stipulates that if five of the following eight conditions are met the individual would be considered to be an employee with comparable conditions of employment. The criteria are as follows:• The individual derives at least 75% of his income for the year from one source;

• The type and volume of work required are determined by the person to whom the service is provided;

• The tools, equipment and materials required for the work are provided by the person receiving the service;

• The individual is subject to work time schedules or minimum work periods which are set by the person receiving the service;

• The individual must perform the service himself and cannot sub-contract the work to others;

• The individual is integrated within the production process or work organisation or hierarchy of the entity requiring the service;

• The activity performed by the individual is a core element in the organisation and the pursuit of the objectives of the person to whom the service is provided;

• The individual performs similar tasks to existing employees or, where work is outsourced, to those performed by former employees.

Implications

Self employed persons who are deemed to be employees will have an indefinite contract period from the date of the initial continuous provision of services and any seniority and due notice will be considered to be with effect from that date. The date of employment shall be the date of the first contract unless there was a break of six months between successive contracts.

The probationary period will be deemed to have commenced on the date of first provision of services and if this was before coming into force of the Order it will be presumed that the probationary period will have lapsed unless proven otherwise. Working hours must be similar to that of a comparable whole time employee or if no comparable employee exists, to the hours specified in the applicable Wage Council Wage Regulation Order or, if none is available, a forty hour week.

Wages shall also be that of a comparable employee, or, in the absence of a comparable employee, the same wages provided as part of the self-employed conditions. All other conditions must be comparable to whole time employees or as provided by the Wage Council Wage Regulation Order. Any penalty clauses in the previous contract of service relating to events before the Order came into force will not be enforceable unless authorised by the Director of Labour.

However, this does not preclude the right by any party to initiate civil procedures for damages applicable under the contract of service. Employer’s Obligations If the status of the individual is deemed to be that of an employee at the time the regulations come into force, the employer is obliged to provide the employee with a letter of engagement or signed statement within eight weeks of the regulations coming into force, setting out the conditions of employment including the information required in accordance with the Information to Employees Regulations 2002 (LN431 of 2002).

If the individual does not agree with the conditions of employment or the amount of wages to be paid and leaves employment, he has a right to institute proceedings claiming unfair dismissal with the Industrial Tribunal. Exemptions The Director of Labour may, in exceptional cases or for activities of a short duration, upon his written request to retain his self-employed status, exempt an individual from the provisions of the Order. Approval of Change of Status by Director of Labour Any conversion of a contract of service from that of a self-employed person to an employee or vice versa must have the approval of the Director of Labour. Penalties The fine, on conviction for contravening any of the provisions of the Order is €1,000 per employee.

Information from: www.deloitte.com.mt

The member states of the European Union clashed over the size of the EU's budget for 2014-20 and the role of cohesion funding for poorer regions. Disagreements aired at a meeting of the General Affairs Council on Tuesday (29 May) will feed doubts that the negotiations can be wrapped up during Cyprus's presidency of the Council of Ministers, in the second half of 2012.

The member states were represented at the meeting by ministers for European or foreign affairs.It was that first time that they had formally debated all the main elements of the EU's next multiannual financial framework (MFF), on both the revenue and the expenditure side. Their discussion was based on a negotiating document drafted by Denmark, the current holder of the rotating presidency, which left blank spaces for individual budget headings and overall figures.

A group of 14 member states, including the Czech Republic, Hungary, Poland, Romania and Spain, defended cohesion spending as a “major tool for investment, growth and job creation”. Another group of seven member states, including Finland, Germany, the Netherlands, Sweden and the United Kingdom, criticised the MFF proposal adopted by the European Commission last June as being “significantly in excess” of needs. Several member states want to cut the Commission's proposal of €1,025 billion by at least €100bn. Nicolai Wammen, Denmark's Europe minister, said after Tuesday's meeting that the “figures part” of the negotiations would happen in the second half of this year. Janusz Lewandowski, the European commissioner for financial programming and budget, said that the Commission was in the “final stage” of updating its proposal, to reflect the spring macroeconomic forecasts, new figures on Europe's regions, and the cost of Croatia joining the EU, scheduled for 1 July 2013.

Social Europe can be translated into business opportunities and the much-needed creation of jobs. During its May plenary session, the European Economic and Social Committee encouraged policy makers to foster social entrepreneurship and enhance corporate social responsibility in the EU. Three EESC opinions focus on how to give new impetus to the social sector and promote the social involvement of European companies.

 

European social business and social entrepreneurship funds The social economy sector already employs more than 6% of all EU workers. Approximately one out of every four businesses that was founded in Europe in 2009 is a social enterprise (e.g. a dairy cooperative where part of the workforce is composed of people with disabilities or a charity group employing persons at risk of poverty and social exclusion). In the current crisis situation, the EESC wants to strengthen growth, employment and competitiveness, while creating a more inclusive society that is in line with the Europe 2020 strategy.

Through two opinions on European Social Entrepreneurship Funds (rapporteur Ariane Rodert, Various Interests' Group) and Social Business Initiative (rapporteur Giuseppe Guerini, Various Interests' Group), the EESC invites the Commission and Member states to make public procurement and access to finance more accessible to social enterprises, develop national frameworks for the growth of social enterprises and appropriately implement the European Social Entrepreneurship Fund. According to the EESC, the future European Social Entrepreneurship Fund should also be accompanied by other financial instruments dedicated to social enterprises development. The European Social Entrepreneurship Fund cannot single-handedly improve the access to appropriate capital.

Corporate social responsibility The European Commission launched a new strategy for Corporate Social Responsibility (CSR) for the period 2011-2014. The EESC adopted an opinion on this subject, drawn up by rapporteur Madi Sharma (Employers' Group) and co-rapporteur Stewart Etherington (Various Interests' Group). The EESC opinion supports the voluntary nature of CSR, but criticises the lack of plans to encourage and help enterprises to take responsibility for their impact on society.

The Committee proposes that companies that make CSR a central feature of their organisation should report on their social and environmental impact using transparent methods. The same should be done by public administrations and large civil society organisations. The EESC also calls for specific measures for SMEs and greater attention to the sector of social enterprise, which has been neglected in the CSR policy initiative.

GRTU has the week written to the Prime Minister following the meeting held on the 3rd May 2012. Amongst the issues GRTU raised was the question of the unnacceptable delays that cargo hauliers (burdnara) are made to suffer by VGT at the Deep Water Quay/Labaratory Wharf to manage the loading and unloading of trailers from Euro Cargo Valencia and other ro-ro vessels. An average load of 180 – 200 containers/trailers required an average of 8 tug-masters to manage the unloading efficiently.

VGT is, however putting in service only 2 tug-masters (eg: Monday 28th May, between 10.30am until 2.45p.m only 2 tug-masters and no inspectors from Malta Transport where on site to monitor) with traders with perishable goods and in need of urgent delivery literally screaming for an acceptable service.

 

This issue has been going on for months. This is in addition to other mismanagement that should be under the Supervision of the Public Regulator. GRTU has written to VGT and met Senior VGT Officials. We have written to Malta Transport and met the Malta Transport, CEO Dr Stanley Portelli urging him to take remedied action. We have raised the matter with the Ministry and lately on two saparate occasions with the Prime Minister himself in the presence of Dr Simon Busuttil.

 

It is incredible that the situation continues in it’s despicable and absolutely non-acceptable state of service. It cannot be that Government continues to tolerate a situation which benefits only VGT, who in spite of their original promises have not invested to meet their obligation at law. GRTU charges Government with this responsability, as in the absence of affective action by the Public Regulation, Government is directly responsible.

 

GRTU has asked the Prime Minister for an urgent action from his end as GRTUhave given up on the Regulator.

 

Unless the situation is affectively remedied GRTU will hold a press conference and demand the resignation of the responsible individuals and reserves the right to take immediate industrial action. You yourself stated last Sunday that people need to be “esteemed” and not just listened to Burdnara and traders are not being esteemed.

 

GRTU has this week written to the Prime Minister  to thank him for the excellent opportunity he gave the Burdnara Group, through Mr Karmenu Zammit, to present a number of issues affacting our members and deserving immediate attention.  One urgent issue that needs to be addressed was the complete lack of enforcement of the exit/entry at the Container Groupage Depot at Hal Far.

An agreement has been reached in 2004 through the intervention of Dr Simon Busuttil, that ensured all groupage containers are in the first stage transferred to Hal Far Groupage Depot. Burdnara trucks have been issued with a special No.Tag (HQ) to enter/exit all Port Areas and Cargo Section at Luqa Airport.

As this operation remains under the control of Customs, and transfers are an extension of Customs Area only, licensed burdnara cannot operate the system unless haulage is done on, the Trader's own registered transport. The same applies for exits from stores where only authorised vehicles are allowed and this to ensure proper enforcement.

GRTU stated that For reasons unknown to GRTU enforcement is not affected and Container Groupage Depot and the Luqa Cargo section have effectively become a free-for-all with complete disregard of the standards applied by licensed burdnara.

 

GRTU requested for all the necessary and immediate action so that the agreement with GRTU will be enforced. GRTU asked for a positive answer in the shortest time possible.