Category: Archive – 2008

 

The Business Forum for multilingualism, set up in 2007 to explore how language skills can have an impact on trade and jobs in the European Union, delivered its report to Commissioner Orban this week. The report gives a clear overview of what needs to be done to help companies gain access to new markets and new business opportunities in the globalised world.

It is based on research reports, case studies, interviews and personal experiences of members of the Forum, chaired by Viscount Etienne Davignon, Belgian Minister of State and former Vice-President of the European Commission.

Multilingualism Commissioner Leonard Orban stated: "This Business Forum report makes the case for multilingualism in European companies, proving how linguistic diversity and investing in language and intercultural skills can be turned into a real asset for prosperity and a benefit for all. Its conclusions and recommendations are an excellent contribution to the new strategic Communication on multilingualism, which I intend to present in September this year. They are also clearly in tune with the objectives established in the Lisbon strategy for more growth and jobs."

Vice President Günter Verheugen, Commissioner for Enterprise and Industry, endorsed the report, saying: "Investing in language skills and managing diversity will be crucial for the European society to fully benefit from the globalised world. Diverse language skills allow for communication, for understanding and for finding new solutions. It is high time, that education and professional training takes account of these needs and offer everybody a broad range of skills. More than ever our society needs the active promotion of intercultural exchange and cross border cooperation."

The following main points emerge from the Business Forum report:

Europe is running the risk of losing competitiveness, as emerging economies mainly in Asia and Latin America are rapidly acquiring solid language skills together with other competences necessary for successful competition.

Formal and informal learning of a wide range of languages should be actively promoted in the EU Member States as the business sector needs an increasingly diversified workforce. Language skills are crucial, if tomorrow's workforce is to consider all of Europe their home base.

Language strategies need to be endorsed at the highest management level in companies across Europe. This can take the form, for instance, of investing in language training, of employing native speakers and of ensuring good multilingual communication via the Internet.

Companies need support for their efforts to use languages strategically, notably via the networks and structures already in place. The role of national export promotion organisations, such as trade councils, is considered crucial in this respect.

A European platform is required for a structured exchange of information and of best practices involving languages for business.

Prominent business representatives in the Forum include:

Winfried Albrink, Head of Training, Henkel Group,

Henning Dyremose, Chairman of the Danish Trade Council and former Managing Director of TDC (Danish Telecom),

Sabina Klimek, manager in Deloitte Business Consulting,

Peter Mathews, Chairman and Managing Director of Black Country Metals Limited and

Caroline Jenner, CEO of Junior Achievement Young Enterprise Europe, a support network for young entrepreneurs.

GRTU warmly welcomed the proposal on reduced VAT rates presented by the European Commission as part of its "Small Business Act" package. The text put forward by the EC regroups a number of existing sector-specific and country-specific rules, and provides a permanent legal framework to introduce reduced VAT rates in labour-intensive sectors, which are currently applied in 18 Member States as an "experiment".

The proposal also extends the scope to other services provided locally, i.e. those that do not impact on cross-border trade and do not distort competition. According to GRTU, in Line with UEAMPE's position, the text, if approved by the Council and thoroughly applied at national level, will be a boon for SMEs, especially those operating in labour-intensive sectors.

UEAPME Economic and Fiscal Policy Director Gerhard Huemer offered the following comments:

"The European Commission has come up today with a valid proposal likely to put an end to years of uncertainty and patchy solutions on reduced VAT rates. The decision to provide Member States with the permanent option of applying reduced VAT rates in labour-intensive sectors deserves particular praise, and represents an important tool in the fight against undeclared work, which will become a less attractive choice. The shadow economy has put honest taxpayers at a competitive disadvantage for too long."

"Reduced VAT rates will have no impact whatsoever on cross-border competition for services provided locally such as restaurants, catering and housing-related activities, and are therefore a safe bet likely to boost local economies. For the same reason, it is also justified to leave the decision on whether to apply reduced VAT rates on these services to Member States, in line with the subsidiarity principle."

"It is now up to Member States to follow suit and give the green light to the proposals put forward today by the Commission. European crafts and SMEs would be dismayed by yet another embarrassing blockade on this long-standing dossier, which must now be closed without further ado."

 

 

 

 

 

 

 

The European Commission has published a proposal that tackles the issue of tobacco taxation as it was felt that important amendments to existing Community legislation in order to modernise and simplify the existing rules, make them more transparent and better integrate public health concerns were needed. In addition, this proposal deals with the alignment of excise duties for fine-cut smoking tobacco ("roll-your-own") with excise duties for cigarettes.

Smoking is still the biggest single form of avoidable death in the Community and one of the leading causes of morbidity and mortality in the EU, with about 650,000 smoking-related deaths per year in the Community.

Smoking is still the biggest single form of avoidable death in the Community and one of the leading causes of morbidity and mortality in the EU, with about 650,000 smoking-related deaths per year in the Community.

Taxation forms part of an overall strategy of prevention and dissuasion which also includes other reduction demand measures such as non-price measures, protection from exposure to tobacco smoke, regulation of the contents, etc. However, according to the World Bank price increases of tobacco products are the most effective single intervention to prevent smoking. A price increase of 10 % decreases consumption on average by about 4% in high income countries among adults.

This proposal suggests the setting of a monetary minimum duty and establishing a tax "floor" for all cigarettes sold in the EU allowing to address health concerns for all categories of cigarettes. It increases the minimum requirements in order to contribute to a reduction in tobacco consumption over the forthcoming five years, notably by preventing that Member States' tobacco control policies be undermined by considerably lower levels in other Member States.

In addition the proposal allows Member States greater flexibility to apply specific duties and to levy minimum excise duties on cigarettes in order to achieve health objectives.

Finally it brings the minimum rates and structure for fine-cut tobacco intended for the rolling of cigarettes into line with the rate and structure for cigarettes in order to discourage substitution of cigarettes by fine cut.

The Ministry for Social Policy has been informed that since the publication of the White Paper a number of landlords are refusing to accept rent from their tenants. The Ministry is informed that landlords are informing tenants that "they are awaiting developments".

The Ministry for Social Policy informs both landlords and tenants that the existing laws regulating the rental market are those currently in place, and that both landlords and tenants continue to abide by such legislation.

The White Paper is a document for public consultation and thus has no effect in law. Tenants' rights as set by the current legislation are valid and are protected by law.

  

Following the decision of the European Commission of 19^th December 2007 ordering MasterCard to withdraw the interchange charges they impose through the local banks on retailers who accept payments by customers on MasterCard Credit Cards, MasterCard has declared that it will comply with the European Commission decision of 19^th December  2007 and completely withdraw its cross-border interchange fees as of 21^st June 2008.

 

Local banks have decided to keep this saving in their credit card fees they pay to MasterCard and keep the "commission" charge to retailers in Malta as before. Clearly, the European Commission decision was intended to increase the profit local banks make on every transaction by credit card but to reduce the final cost to retailers and reduce cross-border barriers to trade.

GRTU expects the Office of Fair Trading, the Malta Financial and Services Authority and the Ministry of Finance the Economy and Investment to intervene, as the two major local banks are abusing their dominant market position and acting collusively together, in a de facto cartel.

 

The Food Marketing Institute (FMI) hailed the House Judiciary Committee (HJC) for approving the Credit Card Fair Fee Act of 2008 in a markup. The committee voted 19-16 in favor of the measure.

"The HJC sent a strong, bipartisan wakeup call to the credit card and financial services industry, which had boasted that this legislation would never go anywhere. Every poison pill amendment was defeated by similar bipartisan margins. We look forward to a full House vote and action on the companion bill in the Senate," said John J. Motley III, FMI senior vice president of government and public affairs.

 

 

The legislation would empower merchants to negotiate transaction fees with credit card networks that control at least 20 percent of the market, which today includes only Visa and MasterCard. The U.S. Justice Department Antitrust Division would oversee the negotiations.

Under the current system, retailers can negotiate only a small portion of the fees with their banks. Interchange fees, by far the most costly, have been increasing steadily over the past 15 years. In fact, the total cost of interchange fees has tripled since the beginning of this decade, from $16.6 billion in 2001 to a projected $48.8 billion this year, according to the Merchants Payments Coalition and data from The Nilson Report.

Americans pay among the highest interchange fees in the world. Almost every other developed economy in the world has investigated

credit card transaction fees, particularly interchange, and found them excessive and anti-competitive.

Interchange Fees Far Exceed Actual Transaction Costs

Credit card companies extract an interchange fee averaging about 2 percent on every credit card transaction. It is well documented that current U.S. interchange rates far exceed actual transaction costs. Only 13 percent of the fee covers the cost to process a transaction, according to the financial services industry research firm Diamond Management & Technology Consultants (A New Business for Card Payments, 2006). As much as 44 percent pays for credit card rewards programs.

The fees also help pay for marketing programs, including more than five billion direct mail solicitations per year, according to Synovate, a card industry research firm.

In the end, all consumers pay these fees – whether they pay by plastic, cash or check – because card company rules effectively force retailers to build them into the price of all goods and services.

The legislation would require a committee of merchants and representatives of card companies and banks to negotiate fees for debit and credit card transactions. The negotiators would decide which costs the fees should cover, such as computer processing, communications and system maintenance, and provide financial institutions a reasonable rate of return. Sen. Richard Durbin (D-IL) introduced the Senate companion bill (S. 3086) with co-sponsor Kit Bond (R-MO).

FMI supports this legislation as a leading member of the Merchants Payments Coalition, a group of nearly 100 associations representing retailers, supermarkets, drug stores, convenience stores, fuel stations, online merchants and other businesses that accept debit and credit cards. The MPC is fighting for a more competitive and transparent card system in which interchange fees are based on actual transaction costs. The coalition's member associations collectively represent about 2.7 million stores with about 50 million employees.

 

 

 

 

 

 

 GRTU today welcomed to its head office Dr Joseph Muscat, new leader of the Malta Labour Party. "It is very easy to understand GRTU" said Paul Abela, President of the GRTU.

"We stand for enterprise unashamedly. We represent that section of the population that prefers to fend for itself, use its private initiative, employs people and creates wealth. What we request from politicians is that they back us. We do not expect them to propose instruments that make life more difficult for enterprise and are there to stand and counted when issues affecting small business owners are raised in Parliament", continued Mr Abela. 

"This is our stand on the reform of commercial property renting and our stand on most issues. We do not represent land holders and property owners. Property ownership is an important store of wealth for our members. It represents the fruit of our labour, but our prime interest is in cultivating the tree that makes the fruit grow and ripen, that is enterprise." With these words Paul Abela welcomed Dr Muscat and introduced him to the members of the National council of GRTU.

Several prominent issues were brought up, the most important ones being the problems the increase in surcharge and diesel prices are creating. Another being the credit cards complaint GRTU had voiced earlier in 2007, present due to the disregard of banks and that of the responsible authorities in taking action.

The Rent Reform was mentioned with GRTU giving its formal written position to both the Government and  opposition. GRTU's formal written position was also given on the reform of MEPA. GRTU spoke of its action in the Charter of Small Business towards which still much still needs to be done, this we hope will be achieved through the Small Business Act. 

GRTU voiced its concerns on the representation of small businesses in Parliament now that the Parliamentary Secretary for Small Businesses and the Self Employed no longer exists.

Other issues raised were: transport to Gozo, sandy beaches at St Paul's Bay, registration tax, animal waste, access to finance, port tariffs, POYC, sea departure tax and the energy saving scheme.

GRTU in line with UEAPME’s, the European craft and SME employers’ organisation, position regarding “General Block Exemption Regulation” (GBER) on State aid and we warmly welcome the what has been  presented today by the European Commission as part of its “Small Business Act” package.

GRTU was particularly pleased by a series of new provisions specifically targeted to SMEs in the GBER, which allows increased aid intensities and makes it easier for small businesses to benefit from public support for investments in training, innovation, energy efficiency and other important areas. GRTU warned, however, that none of these provisions would bring about concrete advantages for European small businesses unless they are properly used by Member States in the next months.

“The General Block Exemption Regulation unveiled today is the first concrete outcome of the Commission’s commitment to “think small first” when designing legislation, and one of the most important element for SMEs in the State Aid Action Plan brought forward by Commissioner Kroes”, said Gerhard Huemer, Director for Economic and Fiscal Policy at UEAPME. “This text opens up new possibilities for aid providers across Europe to set up schemes that fully respond to the needs of SMEs, and to do so in an easier way and for a larger number of eligible areas”, he continued.

 

As requested by UEAPME, a position to which GRTU adheres, the final version of the GBER paves the way to State aid in form of guarantees, one of the most efficient and least market distortive aid instruments. It also redresses some shortcomings that were identified and criticised by GRTU in the past. First of all, the chapter on research, development and innovation now includes aid for innovation advisory services, innovation support services and the hiring of highly qualified personnel, which were previously excluded from the scope of the GBER. Coupled with a broader definition of innovation, these forms of aid are crucial for SMEs lacking in-house expertise and relying heavily on the availability of external advice.

Secondly, the GBER now includes generous provisions for aid in the form of “risk capital” in favour of SMEs, which cannot finance chancier projects with own assets and find it more and more difficult to get support from increasingly reluctant private financial institutions. These rules will ease access to “seed capital” and “start-up capital” to finance the initial phases in the life of a company, when risks are higher, profits are still to come and the return on investment is uncertain.

Thirdly, GRTU was pleased by the chapter on aid for environmental protection and energy savings, which covers a number of important aspects such as the acquisition of “cleaner” transport vehicles, early adaptation to future Community standards and the promotion of the use of renewable energy sources. It also provides a simplified method to calculate the related eligible costs and allows State aid for “environmental studies”.

Finally, GRTU welcomed a number of smaller, but not less important improvements in the GBER. For instance, aid for business transfers, a crucial moment in the life of a business, is now allowed not only for successions within the owner’s family but also when a company’s former employee takes over, as requested by UEAPME.

“The European Commission has presented today an impressive set of rules largely in line with the requests we had put forward in the last years. However, this is only one side of the coin, and it is now up to Member States to follow suit. In 2007, only 12% of the total State aid granted in the EU27 went to the benefit of crafts and SMEs, while larger companies and unproductive national champions swallowed the vast majority. We expect Member States to work to change this figure in the next years and make full use of the opportunities offered by the EC today – otherwise, their lip service and double standards will be uncovered once again”, concluded Mr Huemer.

 

GRTU members UBS (Unscheduled Bus Services) represent Maltese passenger coach owners at the International Road Transport Union (IRU). UBS president Dr George Hizzler attended the extraordinary meeting of IRU held last month.

The conference was especially convened to discuss the problems currently being suffered by professional road transporters as the Governments in European Member States continue to procrastinate and fail t take remedial action to relieve professional road transporters of the excessive price of fuels, loaded as it is by high fiscal and tax impositions.

The resolution of the IRU conference are as follows:

• recognise the irreplaceable role road transport plays in each country as a production tool, interconnecting all businesses and people and in driving the economic, social and environmental objectives of sustainable development, the UN’s Millennium Goals and the EU’s Lisbon Agenda and to restore the appropriate market conditions permitting the road transport operators to pass on costs to clients;

• stop penalising road transport, and economies as a whole, by withdrawing the current inappropriate and provocative proposal on the internalisation of external costs and reduce the overall fiscal and heavy tax burden on road transport operators;

• have intergovernmental institutions permit national governments the flexibility to introduce revision to taxation including the excise duty and VAT for professional road transport operators;

• in order to level the playing field between all transport modes, introduce a single professional fuel duty – significantly below the current minimum duty – applicable to all passenger and goods commercial transport industries that is, road, air, rail and maritime transport;

• implement these measures immediately to demonstrate to road transport operators that their severe concerns are finally being heard and to urgently enter into a constructive dialogue with the road transport industry.