Prime Minister Joseph Muscat attends MEUSAC Core Group ahead of Urgent EURO Summit and June European Council

The MEUSAC Core Group meeting held last Monday hosted Prime Minister Joseph Muscat ahead of the June European Council focusing mostly on economic and security issues. This MEUSAC Core Group meeting however coincided with the Urgent EURO Summit meeting to address the Greek debt crisis and therefore served as an opportunity for social partners to discuss these developments with the Prime Minister.

Prime Minister Muscat explained how the Greek crisis was of great concern as in terms of exposure in view of the national economy, Malta and Germany would be the most highly effected should Greece default on their commitments. There seemed to be a conciliatory tone over the weekend which however the Prime Minister was not expecting a definite solution to be found this week but rather an extension of the negotiations over Greece’s commitments and its new Prime Minister Alexis Tsipras’ electoral promises. Prime Minister Muscat explained that Greece seemed to have tabled a more tangible counter-proposal than the previous unrealistic plans.

The situation described by Prime Minister Muscat was a delicate one. If Greece were to further default leading into exiting the Eurozone there would be substantial political and economic repercussions. Politically this would mean a weaker future for Eurozone and the EU concept as a whole giving further space to anti-Community quarters to be fanned. On the other hand, economically this would have a huge impact on the EU member states having contributed to support the Greek debt crisis as well as on any future situations of trust and solidarity.

The MEUSAC Core Group meeting also addressed the EU Council Meeting being held on 25 and 26 June. The Prime Minister outlined the importance to follow up on the security and immigration issues. Immigration figures could be heavily affected even with one-off large boat arrivals despite the arrangements with Italy having proven to be valuable. The Prime Minister also expected the conclusions of the Council to include some form of timeline on the renegotiation of the UK’s EU accession package.

GRTU President Paul Abela addressed the MEUSAC Core Group meeting expressing the need for a balanced approach to the Greek crisis. Abela described the delicate situation as one which had to be handled in a way which is open to compromise as otherwise if Greece were to be given the message that the EU is not ready to negotiate, it could lead to a position where if Greece fails, it would not longer be a situation to compromise and negotiate but rather to receive nothing at all – with all the negative connotations of that result. This has to be done diligently so as not to send out a message that defaulting and stamping one’s feet is tolerated at EU level.

Paul Abela also delved into two main topics being addressed at the June EU Council. He expressed how the Digital Single Market Strategy for Europe should be given importance. GRTU has been continuously emphasizing that online and e-commerce has become inevitable and is therefore the way forward for the retail sector to challenge competition. This would mean that the Government needs to not only support this agenda but also provide the necessary resources to support Maltese SMEs and micro-enterprises the push they need to upgrade to this reality.

Paul Abela also made reference to the Country-Specific Recommendations which would be endorsed during the June Council. Paul Abela focused his intervention on Access to Finance which is identified as key matter for Malta. Abela recognised that the Government’s vision includes non-bank instruments to address needs of Maltese businesses in a more flexible manner allowing the potential growth that is not being reached due to such access to finance constraints. This was outlined in the Budget 2015 speech with various initiatives such as the Development Bank, Seed Capital and Venture Capital initiatives. Paul Abela therefore appealed for this vision to be accelerated. One cannot simply wait for the banks to open their doors further to business needs, but to find non-bank instruments for business solutions which would support our enterprises and perhaps give an incentive for banks to follow suit.