Fabian Demicoli

The secret of competition policy

 GRTU has yesterday attended a public dialogue with the European Commissioner responsible for Competition Neelie Kroes. The session was entitles ‘How Malta can get the most out of competition policy', organised by the European Commission Representation in Malta.

Dr Joanna Drake, Head of EC representation in Malta's opening statement was that we frequently speak of making the best out of EU membership and a key component of this is competition policy.

Commissioner Kroes said that some years back it would have been unthinkable to believe that Europe could function with 27 Member States (MS) and she therefore believes it is a miracle for the EU to have achieved the status of the most important economic continent today. The economic force that all the 27 have created makes Europe the most powerful in economic terms.

For a small country like Malta being part of the global economy is very important, as is having a Government in favour of a level playing field. These are two essential factors that instigate competitiveness and growth. If Government does not have a policy in favour of a level playing field businesses become lazy.

A single market cannot work if everyone uses different rules, there would be no playing field and no equal access to a fair market. This is why it is essential for Malta to be in line with the basic principles of fair trade in the single market and be on a level playing field like the other MS.  

Commissioner Kroes mentioned an example that goes totally against this principle. She explained that tax payers have already paid €800 m to the shipyards. She bluntly stated that this is not according to EU rules and regulations for a fair market and it is specifically the kind of thing Malta needs to avoid.

This is the reason why the Commissioner earlier yesterday dismissed the Government's plans for Shipyards. Malta has been given time till the end of the year to present a viable business plan for the shipyards, this time according to the rules.

The Commissioner continued by saying that such state aid is no longer acceptable. Malta can succeed only if state aid is used in the right way, directed to horizontal objectives. She mentioned research, development and innovation as perfect examples where Malta needs to direct state aid. It can no longer be given to companies that are not viable but to start-ups and companies with potential.

Malta is currently very low on the innovation scoreboard so this must be placed higher on the agenda. Neelie Kroes gave Malta thumbs up in areas such as e-gaming, with nearly 100 companies already registered in Malta, and on our high tech export.

She explained that the question that needs to be asked when taking certain decisions is: what investments are going to help Malta? She said she understands it is very hard to make the right choices but emotions cannot prevail. Industry should survive on its own two feet.

Commissioner Kroes also expressed her concern on the method some professions are running because it is too hard to enter them at the moment. Competition, she continued, was found to be insufficient in pharmacies, the legal and accountancy sectors and  engineers. She also proposed that we take the examples of the Scandinavians and the Netherlands.

She concluded by saying that Regulations are not always the answer and when not needed they may be harmful. We have to make sure that competition is not just about rules from Brussels.

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