CorporateDispatchPRO Edition 2

Corporate DispatchPro

Issue No.2 | 9th May 2020

Corporate DispatchPro The Journal of CI Group

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Issue No.2 | 9th May 2020

Corporate DispatchPro The Journal of CI Group EDITORIAL TEAM Jesmond Saliba Tonio Galea Matthew Bugeja Keith Zahra Denise Grech Claire Hollier Isabelle Micallef Bonello James Vella Clark Nathanael Muscat Andrew Azzopardi CONTRIBUTORS Ursula Von Der Leyen Charles Michel David Sassoli Joanna Drake Tanja Tatomirovic Prof. Josann Cutajar PRODUCTION ASSISTANT Shirley Zammit Laura Grima DESIGN TEAM Matthew Borg Nicholas Azzopardi

CONTENTS Time for new Aspirations

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Putting more ‘Europe’ in European Solidarity

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Europe must emerge stronger from this crisis

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Malta Insights

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Foreign predatory buying of EU crucial industries

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The private sector and bailout sustainability

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How to avoid extra stress caused by Frequent

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and Intensive Internal Communication Economics vs Health

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Retailing to an ailing market

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Burying the hatchet in times of coronavirus

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Community People in general are social ‘animals’

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so they tend to congregate in groups, communities (Social Wellbeing UOM) CommuniqEU | Education and training

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CommuniqEU | Air Travel

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CommuniqEU | Financial services

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China, COVID19, and the future

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From the Great Depression to the Great Lockdown

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Local Perspective | Global Outlook

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SOURCES

Published By

ADDITIONAL SOURCES

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Design Produced

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Corporate DispatchPro Editorial

Time for new ASPIRATIONS Covid-19 is an opportunity to re-think where we were wrong and to reflect on what is ‘essential’. What we knew as ‘normal’ might not have been totally right but at this point in time, the most essential thing is that we have been handed a unique opportunity to shape a better tomorrow.

Throughout this crisis, the business community has emerged strongly as a guarantor of the common good. As the general conversation will shift from emergency management to recovery planning, the private sector must be allowed more room in the public arena. Businesses, on their part, ought to become more mindful of their civic role and step up their involvement in the community from conventional CSR to meaningful ESG programmes.

In the post-Covid era, expectations will change for every stakeholder and, now that the private sector affirmed its centrality to public affairs, businesses must not shrink back to the periphery.

Our target is Malta 2030 as an opportunity to shape the Malta of tomorrow.

The socio-economic programmes driven by the public and private sector in the last years made our country one of the leading economies in Europe. However the economic recovery will now largely depend on the pace of recovery of other countries particularly those on which our tourism sector depends. But not only.

It will also be depend on the concerted effort of public administration, NGOs and the private sector who through a collective effort can 5

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Corporate DispatchPro ensure a comprehensive social cohesion framework allowing all strata of society to benefit from the economic recovery of the country.

Covid did not have the same impact on all families. Home-schooling and teleworking introduced new challenges as working parents struggle to keep their agility in completing their corporate tasks while looking after their children and completing the increased housework workload and in some cases looking after the elderly.

Therefore life after Covid-19 will not be the same. While government’s role is to encourage and award efforts towards addressing societal and environmental ailments, the business community needs to embrace long-term goals to secure a profit that includes a social purpose. Adopting a shared value mentality in the corporate world demands a shift from a short-term objective to a longer-term vision through which various elements of the value chain are moulded to reduce and potentially eliminate any negative environmental or social impact.

The rebound of the European economy after this pandemic depends on the agility of creating a social innovation culture where business, civic society and public administrations work together to shape public policy, implement programmes and develop products and services that address the social needs while providing a profit.

The next decade therefore presents the challenge of ensuring the same quality of life and levels of employment we had in the past years, while addressing societal challenges of the ageing population and poverty.

The reality of a post-Covid society will accentuate the need to address challenges particularly if the economic slowdown persists to long weeks resulting in a substantial increase in unemployment.

Nonetheless, Malta needs to continue to work towards a resilient and productive economy, providing top-notch education to our children and invest in the best health and social care systems. At the same time, Malta’s workforce needs to embrace lifelong learning so because it will be only through newly acquire skills that we will 7

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Corporate DispatchPro be able to preserve economic growth and guarantee increased prosperity.

And although the last decade has witnessed an increase in female participation in the labour market, the gender pay gap still needs to be addressed while efforts to boost female presence in C-level positions and politics at local and national level should continue.

The aspiration is for Malta 2030 to be a safe and economically stable country where the young generation can grow, thrive and work on their dreams and aspirations. Malta will continue to implement and respect civil and equal rights, increase normality for people with disabilities, ensure equal maternal and paternal rights and guarantee equal wages based on role and not gender identity.

The months following the recovery from Covid will be crucial for Malta. The decisions taken in the next few months will mould Malta’s journey towards the next decade.

YOUR TEAM AT CICONSULTA Shirley Zammit, Isabelle Micallef Bonello, James Vella Clark, Nathanael Muscat, Tonio Galea, Laura Grima, Keith Zahra, Nicholas Azzopardi, Matthew Borg, Denise Grech, Matthew Bugeja, Jesmond Saliba

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Corporate DispatchPro JOANNA DRAKE

Putting more ‘Europe’ in European Solidarity The eyes of Europeans are turned upon EU institutions as national governments struggle under the weight of the coronavirus. In the wake of the Covid-19 threat, the European Commission mobilised all tools at its disposal to assist member states with critical needs such as securing the flow of goods around the bloc or placing joint orders for medical supplies and bringing stranded citizens safely home.

The swift actions were crucial to limit the viral spread and support jobs in the immediate term, but it became increasingly clear that a strategic, long-term response was needed to address the deeper effects of the disease on economies and communities.

While the epicentre of the pandemic was rapidly shifting from China to Europe in the first weeks of the new year, EU leaders left discussions about the Europe’s budget also technically known as the Multi-annual Financial Framework (MFF) to focus on the unprecedented hazard hitting their countries. But the unfinished business over the EU budget could now hold the key to demonstrate European solidarity in its most tangible form.

As late as February, European Council President Charles Michel attempted to broker an agreement pegging the MFF at 1.07 percent of gross national income before it was turned down by heads of state. Since then, the context has changed so much that the question is no longer about finding a workable GNI percentage but repurposing the EU budget to send a powerful signal of community spirit among member states to EU citizens.

Talks about the MFF now offer the best opportunity to reconcile the major goals for the medium-to-long term objectives of the Union: the economic rebuild in member states, the European Green Deal, 11

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the digital transformation project, and European leadership in the world. This is the moment of truth for European solidarity.

Commission President Ursula von der Leyen captured the magnitude of the opportunity when she described the revamp of the budget as the “mothership of EU recovery�. The new financial framework, which will be presented in the coming days, will not merely allow European countries to pick up from where they left off, but it shall be a courageous step forward into the future that citizens envisage.

More importantly, the seven-year budget will provide a collaborative strategy for member states that looks ahead with ambition and confidence. Before taking the MFF back to the drawing board, the European Commission committed itself to propose innovative financial instruments that enable a sustainable, fair and resilient Europe.

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Corporate DispatchPro SUSTAINABILITY, FAIRNESS, RESILIENCE Already in December, when the new Commission was formed, sustainability was declared a top subject on the agenda, resulting in the inauguration of a wide-reaching EU Green Deal that aspires to make Europe the first carbon-neutral continent. But sustainability is not only achieved by bold policies on renewable energy, clean transportation or the restoration of the natural environment; it needs a radical conversion of the economy that does not punish competitiveness. Which is why a complementary priority for the EC is building a Europe fit for the digital age.

The vision for sustainability encompassing a green revolution and a digital transformation will mean a viable and wholesome food production process, the creation of new stable job categories, tourism that respects communities and their heritage, cities that are prepared for the future.

The shock of the pandemic was symmetric across European regions and cities, and a fair remodelling of the budget requires a symmetric recovery. The MFF should, therefore, actively support an equal recovery across the EU by making sure that countries take off from the same starting line; members that were hit harder by the virus spread, or whose GDP was not strong enough to withstand the economic and social blows, must not find themselves at a disadvantage.

Divergences at the restart, will only widen into unbridgeable gaps over time. Besides, disparities not only undermine the value of fairness but threaten to torpedo the programme for sustainability, too, and a revised EU budget will seek to close the economic gaps between countries caused by the pandemic, fairly.

At the same time, the EU wants to be prepared for the next crisis whichever shape it comes in by improving its resilience. A major focus of the Commission is to restore the strategic autonomy of the bloc and abandoning an over-reliance on external partners for critical supplies. This is a lesson learnt the hard way during the outbreak, but the MFF now comes just in time to address the situation head on. A more resilient Europe demands financial backing for industry and SMEs operating in the manufacturing 13

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sectors. Europe not only has the need to revitalise its technical and production heart, but the potential as well. Simultaneously, direct investment by non-EU companies and states has to be monitored more closely to safeguard work, standards and, most importantly, strategic supply chains.

Moreover, it will strengthen the EU’s leadership role in the world to pursue a responsible and just global trade agenda. A greater degree of self-reliance will make European governments more resilient to emergencies and, consequently, provide long-term support to sustainability and fairness among communities.

FOUR HARD QUESTIONS The Multi-annual Financial Framework comes at the right time to integrate the EU’s current and future priorities. EU leaders have given their unanimous support to the bold and forward-looking vision during a virtual summit held towards the end of April. But forming such a package is more difficult that framing it and there will certainly be long discussions on details of implementation.

There are four major questions that EU institutions and member states will be looking at when the Commission presents the revamped MFF this week: the size of the budget; the direction of investment; the timing of disbursement; and the type of financing methods.

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Most of the planning ahead will be determined by the global fund of the budget. Recent discussions suggest that the own-resource ceiling will be raised from 1.2 percent of GNI to 2.0 percent for the coming two to three-year period. Meanwhile, the greatest share of the MFF is expected to be allocated to the so-called modern policies that channel investment towards the EU Green Deal, digital transformation and the Union’s strategic autonomy. Negotiations on the new budget term were already protracted before the pandemic threw a wrench in the works, but the crisis has only increased the need for funds to be made available as soon as possible. The timing of the release will prove vital for economies, and countries expect a substantial frontloading of cohesion funds while discussions will take place to be able to access recovery funds by the first half of 2021, latest.

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Finally, a sound solution to the type of the financial package will strike a balance between loans and grants. EU governments left their virtual summit without an agreement, with a difference in opinions noticeable mainly between northern and southern members. The EU Commission, however, said that it will come up with a compromise that works for all sides.

A BUDGET TO LOOK FORWARD TO The coronavirus stormed into European life and upheaved the health systems, economies, inter-governmental relations of all member states. Citizens and nations around the EU have shown a formidable sense of unity and common will, and European institutions were successful in triggering programs that facilitated coordination and efficiency.

The extraordinary emergency has, thus, redefined the value of European solidarity. The Multi-annual Financial Framework will now be the first, and possibly the biggest, test in translating the concept into meaningful action for citizens. The EU finds itself at an important juncture in its story and decisions taken in this intense period will reverberate throughout generations. The new-look budget is the seed for a new-look Europe.

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BY THE PRESIDENT OF THE EUROPEAN PARLIAMENT DAVID SASSOLI, THE PRESIDENT OF THE EUROPEAN COUNCIL CHARLES MICHEL AND THE PRESIDENT OF THE EUROPEAN COMMISSION URSULA VON DER LEYEN

Europe must emerge stronger from this crisis In 1950, Europe was in crisis, still devastated physically and economically by the effects of World War II, and politically searching for a way to ensure that the horrors of the war could never be repeated.

Against this dark backdrop, on May 9, French Foreign Minister Robert Schuman outlined his vision for how Europe could achieve this objective, by creating common institutions to make war not just unthinkable but materially impossible. His words changed the course of history and laid the foundations on which his generation and future ones built the European Union we have today.

The 70th anniversary of the Schuman Declaration comes at another moment of crisis for Europe. Across our continent, more than 100,000 have died because of the coronavirus in the last months.

Hundreds of millions have faced unprecedented restrictions in their daily lives to help contain the spread of the virus.

As leaders of the three main EU institutions, our thoughts today are first with all those who have lost loved ones. Our gratitude is to the essential workers who have continued to work throughout this crisis. Those on the frontline in our hospitals and care homes, fighting to save lives, but also the delivery drivers, shop assistants, police officers, all those working to ensure that daily life can continue.

We are also thankful for the spirit of solidarity and civic responsibility that European citizens have shown. The millions who have volunteered to help in whatever way they can during the crisis, be it 17

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Europe Day

/ˈjʊərəp deɪ/ n.

Celebrated on 9 May each year, it is considered the first move towards the creation of what is now the European Union. It marks the anniversary of the “Schuman declaration” named after the French foreign minister Robert Schuman. Exactly 70 years ago today, he urged for a new form of political cooperation in Europe, that would make war between Europe’s nations unthinkable and would lead to prosperity. #StrongerTogether

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Corporate DispatchPro shopping for an elderly neighbour, stitching face masks, or raising money to give to those in need. Europe is at its best when it shows warmth and solidarity.

Europe acted boldly to ensure that the single market could still function, allowing medical supplies to arrive where doctors and nurses needed them, ventilators to arrive where they could save lives, and food and essential goods to get to our shops where Europeans could find them on the shelves.

We took unprecedented decisions to ensure national governments had the fiscal capacity they needed to tackle the immediate crisis. We transformed the European Stability Mechanism into an instrument to fight COVID-19. We have made 100 billion Euros available to keep Europeans in jobs, by supporting national short-time work systems.

And the European Central Bank provided unprecedented support to ensure lending to people and businesses continued.

We still need to do much more. As our Member States are tentatively and gradually lifting lockdowns and restrictions, the first priority must remain saving lives and protecting the most vulnerable in our societies. We must continue to do all we can to support research into a vaccine for the coronavirus. The success of the coronavirus global response pledging conference of 4 May, which has raised 7,4 billion euros and has brought under the same roof global health organisations to work together on vaccines, treatments and diagnostics, shows just how rapidly the world can rally behind a common cause. We need to sustain this mobilisation and keep the world united against coronavirus. Europe can play a decisive role here.

At the same time, all Member States must have the fiscal space needed to deal with the ongoing medical emergency.

And we need to prepare for the recovery. After fearing for their lives, many Europeans now fear for their jobs. We must restart Europe’s economic engine. Let us remember the spirit of Robert Schuman and his peers - inventive, daring and pragmatic. They showed that getting out of moments of crisis required new political thinking and breaking from the past. We must do the same and recognise that we will need new ideas and tools to support our own recovery. We 19

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Corporate DispatchPro must recognise that the Europe that will come out of this crisis cannot and will not be the same as the one that entered it.

First, we must do more to improve the lives of the poorest and most vulnerable in our societies. Too many in Europe were struggling to make ends meet before this crisis even began. Now millions more face an uncertain future, having lost their jobs or businesses. Young people and women are particularly affected and need concrete and determined support. Europe must be bold and do all that it takes to protect lives and livelihoods, particularly in the areas most affected by the crisis.

Our Union must also be healthy and sustainable. One lesson to learn from this crisis is the importance of listening to scientific advice and taking action before it is too late. We cannot put off addressing climate change and must build our recovery on the European Green Deal.

And we must be closer to citizens, making our Union more transparent and more democratic. The Conference on the Future of Europe, which had been planned to launch today and was only delayed due to the pandemic, will be essential in developing these ideas.

We are at a time of temporary fragility and only a strong European Union can protect our common heritage and the economies of our Member States.

Yesterday, we commemorated the 75th anniversary of the end of World War II. We must always remember the horrors and barbarism of war and the sacrifices made to end it. Today, we reflect on what happened next. Let us remember the 1950s generation who believed that a better Europe and better world could be built out of the ruins of war – and then went on to build it. If we learn those lessons, if we remain united in solidarity and behind our values, then Europe can again emerge from crisis stronger than before.

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Corporate DispatchPro NATHANAEL MUSCAT

MALTA SCORES LOWEST TAXES ON ELECTRICITY PRICES IN THE EU The share of taxes and levies worked into electricity prices for Maltese households stood at six percent at the end of last year, the lowest rate in the EU. Figures by Eurostat reveal that, on average, taxes and levies accounted for about 40 percent of household electricity prices in EU states in the second half of 2019, rising to 54 percent in Germany and 64 percent in Denmark.

Statistical data for the last six months of last year, also shows that Malta had the fourth-lowest household energy prices calculated in absolute terms, at around â‚Ź13 per 100 kWh. However, adjusted to purchasing power standards relative to each country, prices in Malta were the third-lowest following Finland and Luxembourg and ahead of France and Sweden.

Expressed in euro, the average price in the EU stood at â‚Ź21.6 per 100 kWh, an increase of 1.3 percent compared with the second semester of 2018, reflecting the overall inflation rate measured by the Harmonised Index of Consumer Prices (HICP).

MALTA: TOURISM DROPS BY MORE THAN HALF IN MARCH The total number of inbound tourists decreased by 56.5 percent in March, compared with the same month last year. Figures by the National Statistics Office reveal the harsh reality for the tourism 23

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sector in Malta as measures to limit the spread of the coronavirus started coming into effect from the end of February.

Between January and March, inbound tourism fell by 13 percent from the first quarter in 2019 and by 11.6 from 2018, There were around 371,000 visits translating into 2.2 million nights – a 20 percent drop from the previous year.

The number of visitors in March was slightly over 75,000 pushing the total night-spend down by 60 percent from March 2019.

Tourism over the three months fell sharply across all categories: leisure, business, and specialised holidays; however, inbound travel from non-EU countries still rose by almost 125 percent. In March, too, tourism from outside the EU, which includes the United Kingdom, was up by 25 percent. Incidentally, the UK represents the largest market corresponding to roughly a third of all incoming tourists.

Expenditure by tourists over the three-month period was around €600 per capita, a decline of more than five percent from the first quarter of 2019. Excluding accommodation and travel costs, each visitor spent an average €240 during their stay, the lowest amount in three years. In fact, total tourism expenditure was estimated at just under €225 million, 17.5 percent down from the year before.

The first Covid-19 measures came into force on February 28 mandating a quarantine period for inbound travellers from highrisk countries. Restrictions were gradually increased until ports were closed on March 18 and the airport, three days later.

MALTA: SOCIAL SECURITY SPEND TOPS €240 MILLION IN FIRST QUARTER The expenditure on Social Security Benefits rose by 5.8 percent between January and March this year compared to the same period last year. Figures released by the National Statistics Office show a total spend of €243 million, the highest in the 18 years under review since 2003. The amount does not account for benefits related to Covid-19 measures, which started being disbursed in April.

There was a rise in both contributory benefits, such as retirement pensions and industrial injuries gratuities, and non-contributory benefits which include disability assistance and in-work allowances.

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Corporate DispatchPro The increase in contributory benefits was €12.2 million, or 6.7 percent over the previous year, while non-contributory benefits rose by an additional €48.7 million, or 2.3 percent.

The biggest share of contributory benefits are old-age pensions, making up three-fourths of the total expenditure. The largest spend in the category goes for pensions in the Two-Thirds system, which have also registered the steepest rise over a year as the number of beneficiaries grew by over 50,000.

Allowances for family and children account for nearly a third of non-contributory benefits, the largest portion in the category.

The biggest rise was registered in children’s allowance schemes reflecting an increase in new beneficiaries of more than 40,000.

EMISSIONS FROM ENERGY USE DOWN IN THE EU, UP IN MALTA Malta is one of four EU countries to have increased CO2 emissions from energy use in 2019, according to data published by Eurostat.

Estimates show an overall reduction of 4.3 percent in carbon dioxide emissions from fossil fuel combustion in the EU compared with 2018.

The highest decrease was recorded in Estonia, with a drop of 22 percent over a year. Malta, on the other hand, registered the third-highest increase of 2 percent, following Austria (+2.8%) and Luxembourg (+7.5%). At the same time, Malta had the smallest share of total EU emissions from energy use throughout 2019 at 0.1 percent. Germany, the largest contributor, accounts for a quarter of the bloc’s emissions and reduced emissions by 4.6 percent.

Analysts observe that the significant drop across the EU-27 coincides with an increase in the price of the EU emission trading system allowances that came into effect in 2019, making it economically less profitable to use fossil fuels for the production of electricity.

CO2 emissions are generated in the country where the fuels are burned, so imported electricity has no effect on the rates in the purchasing country as emissions would be reported in the country where the electricity has been produced.

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MALTA REGISTERS THIRD-LOWEST DROP IN RETAIL TRADE IN THE EU The volume of retail trade in March decreased by 1.2 percent from February, reflecting an EU-wide trend. Figures by Eurostat show a sharp drop in trade as the coronavirus pandemic was spreading across EU states in March; volume went down by 10.4 percent in EU countries and by 11.2 percent in the euro area compared with February.

The rate in Malta registered the biggest drop in the six months under review since October, hot on the heels of a 0.8 percent increase in February. The decrease, however, is the third-lowest in the EU following Norway (-0.9%) and Hungary (-0.2%). Estonia is the only country to manage an increase, even if by a slight 0.1 percent while no data is available for the Czech Republic, Cyprus, Greece, Italy and the Netherlands.

The decrease across the EU was pushed down by significant decline in the non-food products, down by 21.3 percent, and automotive fuel sales, down by 19.3 percent. The drop was even more marked in Eurozone countries, registering a 23.1 percent and 20.8 percent decreases in non-foods and automotive fuel trade, respectively. The volume of trade for foods, drinks and tobacco rose by 4.7 percent in the EU and by 5.0 percent in the euro area.

Compared with March 2019, there was a general downward performance of 8.2 percent in the EU-27 and 9.2 percent in Eurozone countries.

MALTA: TRAFFIC ACCIDENTS DOWN BY 8 PERCENT IN COVID-19 PERIOD The number of road traffic accidents dropped sharply in March contributing to an 8.2 percent decrease in accidents in the first quarter of the year compared with the same period in 2019. There were 261 accidents that caused injuries, including two fatalities.

A third of the 3,357 accidents occurred in the northern harbour area stretching from Qormi to Msida to Pembroke, however the district registered a 15 percent decrease in accidents compared to 2019. On the other hand, an increase of six percent was observed in the south

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Corporate DispatchPro eastern area from Marsascala to Gudja to Qrendi. Birkirkara was the locality with the highest rates of accidents accounting for slightly over eight percent of total instances.

Most collisions occurred between passenger cars, but there were 27 crashes into properties as well as 10 accidents involving a passenger car and bicycle, two of which causing grievous injuries.

MALTA ONE OF THREE COUNTRIES TO REGISTER INCREASE IN INDUSTRIAL PRODUCER PRICES Malta, Cyprus, and Latvia were the only EU members to post a rise in industrial producer prices in March. Estimates by Eurostat indicate that industrial producer prices fell by 1.4 percent in the EU and by 1.5 percent in the eurozone compared to February. Malta bucked the trend a registered an increase of 0.2 percent, the same as Latvia.

Cyprus recorded the highest increase at 0.5 percent while the biggest decrease was observed in neighbouring Greece, at -5.3 percent.

Compared with March 2019, industrial producer prices decreased by 2.8 percent in the euro area and by 2.5 percent in the EU. The most significant drop was felt in the energy sector which decreased by 5.5 percent. Prices for durable and non-durable consumer goods saw an increase of 0.1 percent.

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Corporate DispatchPro CLAIRE HOLLIER

Foreign predatory buying of EU crucial industries Considering the current economic crisis caused by the COVID-19 pandemic, there are signs of increased concern that European companies, notably those in critical sectors, are increasingly vulnerable to foreign takeover attempts.

This was brought to light by Die Welt on the 15 March, reporting that the Trump administration offered substantial funds to get hold of a coronavirus vaccine developed by a German company – CureVac. Die Welt reported that Trump was trying to lure the Germany-based company to shift its research wing to the United States, presumably to develop the vaccine first and foremost (or rather exclusively) for the United States. Reuters contacted a spokesperson for the German Health Ministry who confirmed the report in the Welt am Sonntag.

This prompted German politicians to vociferously criticize the US. The Minister for the economy Peter Almaier reacted to the report in the Welt am Sonntag stating ‘Germany is not for sale’. Reuters highlighted the tweet by Karl Lauterbach, a senior lawmaker with the Social Democrats, junior partners in Chancellor Angela Merkel’s coalition, ‘The exclusive sale of a possible vaccine to the USA must be prevented by all means. Capitalism has limits.’

Against this background, the European Commission on 25 March, issued new guidelines for the screening of foreign direct investment (FDI) in companies and critical assets in the European Union (EU), notably in the fields of health, medical research, biotechnology and infrastructures being essential for security or public order. These guidelines are to be applied within the context of Regulation (EU) 2019/452 establishing a framework for the screening of FDI into the EU, set to be applied in October 2020. In its press release the 29

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ETHICAL V I TA M I N S

with an organic heart A v a i l a b l e at B r o w n ’ s

/BrownsPharma

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Commission states that the guidelines will operate in the public interest, in accordance with the requirements of the Regulation, since ‘protection of public health is recognized as an overriding reason in the general interest’ under EU law.

Member States consider that predatory investment, eg. Vulture purchases by investors outside the EU when stock markets have slum down, is also viewed as contrary to public security, not only public health.

This increased awareness to retain resources into the EU, may well lead to the revisiting of policies in favour of governments taking over equity stakes in companies considered vital for the Member State and the EU. If anything, this pandemic has led to the revisiting of stringent competition and state-aid rules and adjusting to a framework of justifiable state-intervention – attributing more weight to public security, public health and the retention of EU assets.

Disclaimer: This disclaimer informs readers that the views, thoughts and opinions expressed in the article, belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.

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Corporate DispatchPro MATTHEW BUGEJA

The private sector

and bailout sustainability There is a term to describe what COVID19 is: a black swan event. Perhaps one of the best definitions of a black swan event comes from the website, Investopedia: A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the widespread insistence they were obvious in hindsight.

No matter how you dissect it, COVID19 hits every single one of those factors. It was largely an unpredictable event, and has had very severe consequences. A global pandemic is rare, the impact is almost unheard of, and with the benefit of hindsight, we can probably say that the warning signs from the initial outbreak in Wuhan, China were there for all to see.

The novel coronavirus’ impact has been both wide from a geographical perspective, and deep from an economic standpoint.

This piece will focus on the impact to businesses and the assistance given to them by their governments, and try to understand how certain can survive the havoc wrought by the pandemic.

Businesses have been devastated by the lockdown imposed by governments in order to contain the spread of COVID19. If people are not allowed to physically leave the house in order to engage in economic activity, a lot of businesses will suffer considerably. A few easy examples in order to illustrate this point include cinemas, airlines, hotels, restaurants and nightclubs. These businesses need people to be physically present in order to provide their service, and the more customers they have, the better. COVID19 has shut these down for the foreseeable future, through no fault of their own.

So how do they move forward? Should governments continue to provide funding on an open-ended basis? Can they afford to?

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Corporate DispatchPro This is a difficult question, with a lot of arguments to be made. But let’s boil it down to its essence. Governments all around the world are going through the same thing, but to varying degrees. In short, their income from taxation, particularly sales taxes and VAT, has gone way down, whereas their spending to help bailout and sustain economic operators has gone way up. Any Finance Minister will tell you that they far prefer increased income and reduced expenditure any day of the week, but we live in troubled times, and governments have had to spend big to help employers keep their employees.

Governments should be helping companies out. To not do so would lead to mass layoffs, and a much long return to economic growth.

This in turn would have not just economic, but also social and political implications.

They would have to find a way, or else, they would need continued government assistance for a two year period which is a big ask for any government, anywhere in the world.

But then there might be a problem. The coronavirus is not expected to go away anytime soon. We may be at least 12-18 months away from a vaccine, and you may have to add 6 months on top of that to cater for manufacturing and global distribution. That is assuming that the vaccine is effective against all strains of the coronavirus, both current and future, given that viruses tend to mutate over a period of time. But let’s assume that a vaccine is found, and is effective.

Let us assume that by Spring 2022, everyone around the world will have taken the vaccine. How would business models that require the physical presence of customers cope, if they had to reduce the amount of clients in their establishments in order to respect social distancing? They would have to find a way, or else, they would need continued government assistance for a two year period - which is a big ask for any government, anywhere in the world.

Perhaps the answer should be that their business models change entirely. Cinemas can opt to reduce capacity to enforce social distancing. Hotels can continue to operate, but with regular disinfection, and by monitoring the health of its occupants to prevent an outbreak within its establishment, even through the use of wearable technology. Restaurants will need to operate at reduced capacity in order to ensure that its customers feel comfortable dining there, and waiters should work with gloves and masks in order to provide reassurance that they are taking their customer’s health and well-being seriously.

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Corporate DispatchPro These businesses will need to be innovative in order to adapt to the change in circumstances. Governments can provide funding to help tide them over for a period of time, such as a few months, but all this does is buy time in order for things to start returning to some form of normal - a new normal. The very nature of business is to provide value to your customers through the provision of a high quality product and/or service. That requires innovative thinking.

They will need to be innovative now if they are to survive.

Businesses should rely on the government to help them out, but they should also consider how they will operate in the next two years with as little government funding or assistance as possible.

COVID19 has pressed the reset button on the global economy. Every business has been hit to some extent or other. But it may be the case that those companies that prove to be incapable of adapting to the change of circumstances must be allowed to perish, so that other new, and innovative companies can take their place. Governments and financial institutions should consider offering funding on the same premise of how a loan is given - on the basis of sustainability of the business model and its opportunity to grow. Bailouts should not be given for the sake of them, but rather assessed against whether the business will be able to find its own feet.

This is a tough statement to make, given that there are various livelihoods at stake. However, those companies that show they will be incapable of innovating and surviving the coming year or two may not be worth saving. Taxpayer money is more limited than people realise, and the requests are far too many. Government assistance will stop the bleeding for the moment, but it will be up to the private sector to act as the stitches that keep the wound closed. The sooner they realise that, the better.

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Corporate DispatchPro TANJA TATOMIROVIC

How to avoid extra stress caused by Frequent and Intensive Internal Communication Some practical principles of internal communication in times of crisis or information overload One of the things I learned in childhood was not to accumulate material goods, because, as my parents taught me, in that case, I would not recognize the value of any of those specific things.

In my work, as well as in crisis communications, in which I have been engaged for certainly more than a decade, I have recognized the principle of sufficiency. When I worked in the petrochemical industry, where people’s lives were endangered every day, as well as in the much more benign crisis of Eutelsat satellite failure, I recognized that it’s only the v-team that needs to know as much as possible, but not all the information is required at all times to be shared with a wider internal audience within the company.

Today, in an age when we have a need to have intensive internal communication, and every day we have new information packed in different ways and for different audiences, and based on my experience so far, I think we need to keep the basic rules. Not to create panic by communication, nor to communicate anything that might, under normal circumstances, need to be brought to light.

1. SIMPLICITY IS THE KEY: Gather all available information and group it by topic. Give communication channels simple names that will be remembered by all, and that will not arouse the aversion or opinion of employees that this is completely irrelevant in times of crisis. The language of communication should be simple, much simpler than usual when the business is as usual. Things need to be simplified in times of any crisis. In every sense.

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2. CHOICE OF COMMUNICATION CHANNELS: Try to communicate all relevant business information, as well as important employeerelated decisions, on one channel — website, Yammer, Microsoft Teams channels, or intranet, without overwhelming people with a bunch of emails, presentations, links. It’s easier to find a topic online, in one place than in Inbox. It’s easier to comment online than to reply-all and “chat” via email. “OK,” “Sure!” or similar phrases should be kept to a minimum in reply-all emails. Also, try to avoid creating similar communication channels. Do not copy content that already exists on another site — no need to duplicate. One is better than countless.

3. COMMUNICATION FREQUENCY: In crises, especially if you are in such for the first time, try to make decisions grouped, communicated at once or in a minimal number of emails, as each email on a sensitive topic brings stress to its very existence, not just by the volume of content. Nobody would like to have stress after stress for days. Do not send messages to all employees more than once a week, or at most twice, in case of an urgent crucial decision or information to be shared quickly. Aside from weakening the importance of messages, you may no longer have anything to communicate in the coming period. Some necessary actions or important news can easily be ignored, lost in the plethora of information you share every day or hour.

Aside from weakening the importance of messages, you may no longer have anything to communicate in the coming period.

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Corporate DispatchPro 4. THE RIGHT SENDER AND THE RIGHT AUDIENCE: Gather information about your business successes despite the crisis, group them, add the numbers, the facts, the real success behind it, and send it to the right audience. The employees will certainly be pleased if you put management in the Cc of this e-mail so that the voice can be heard further, and the effort and result achieved in times of crisis when the work is demanding, gain importance. Make sure you always know the audience and clearly identify the sender of the message to a broader audience. Not all employees need to be always there, nor must the CEO send all the messages. Allow the leaders of specific segments to send a message and be endorsed or praised by the CEO. 5. BE FAIR: If you are already communicating via email and it is a custom in your company, try to be fair. This is especially important in times of crisis and intense stress and anxiety. If you reply-all on one topic, try doing the same on another subject, perhaps of less importance to you, but as a way of motivating your team members to do even better. Your answer, especially if you are a manager, can be vital for further initiatives. If you only respond to business results, and you neglect other achievements in marketing, CSR, or simply your team members’ initiatives, you probably risk killing commitment and motivation.

6. ALIGNMENT AND RELEVANCE OF INFORMATION: Remember that any communication that goes to a larger group of employees must be coordinated with the crisis v-team. You also need to check the relevance of each information and not communicate anything outside your own business domain. If it is a business success that you have heard from colleagues or received information as input through the form through which you collect such information, go to the leader of that segment to inquire about the details.

Not all information is always relevant. They come from different sides, with different interpretations. We need to double-check every, especially in times of crisis, when we humans are prone to extremes — to dramatize the situation, but also to beautify reality in order to mitigate the crisis seemingly. And, if there is a rule for communication to be approved, that means you would have to get approval then, even for your opening statement. In companies 41

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that have communications professionals, rely on them. They may play with your style, grammar, or punctuation, but they will do it to make you look and sound better and more relevant.

7. OPENNESS AND EMPATHY IN COMMUNICATION: In crises, especially if they have a more significant impact on the business or future of employees, all senses are sharper than usual. Try to answer any questions your employees ask you through any communication channel. Stick to consistent attitudes and statements, but make sure you don’t sound like a corporate machine throwing out approved corporate statements. Show empathy, share your own mistakes, learnings, feelings; don’t play Superman. Be as open as possible. And, very importantly, don’t make the usual comments about success, accidental mistakes, or failures. A crisis is not a regular state of consciousness. A crisis is a time when, as a leader, you should be a human being above all. (You should be one even when there is no crisis.)

During each crisis, no matter how big and impactful it could be, employees are looking to leaders for guidance and clarity. Whether or not employees are scared, they have a right to be worried about the future and need to be met with compassionate responses, clearly and openly. And with reasonable frequency.

The statements [or testimony] I offer today represent my own personal views. I am speaking for myself and not on behalf of my employer, Microsoft Corporation.

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Corporate DispatchPro MATTHEW BUGEJA

Economics vs Health Everything is about COVID19 at the moment. There is no escaping the unprecedented impact it has had on the entire planet in just three short months. Short of a global conflict, this event has shook entire populations to their very core, and we have seen that locally as well. People are avoiding large gatherings, trying to stay away from older relatives to avoid infecting them, and non-essential businesses have closed.

Entire economic sectors have come to a grinding halt, none less so than those which depend on people frequenting them often, and in large numbers, such as the tourism, catering and aviation industries. Those three sectors will continue to feel the pain for some time to come, no matter how quickly we manage to manage the threat of the virus.

This all comes down to one key fact - a vaccine for the novel coronavirus will not be available for a minimum of 12, but perhaps 18 months. Once it becomes available, it is a question of distribution, since every human being on the planet will want to be vaccinated‌ with a few exceptions, The global population hovers around 7.7 billion people at the time of writing, and it is difficult to foresee just how the vaccines can be rolled out fairly and equitably across every country simultaneously without some serious issues, and without a truly global coordinating effort. In short, It will probably take another year or so on top of that to produce enough vaccinations for even half of the global population, deliver it, and administer it to people. In short, we will be dealing with COVID19 to some degree until 2022, at a minimum.

There are still many things we do not know for sure about the coronavirus, at least at the time of writing this. We do not know for sure if you are immune to it once you become infected, and if so, how long that immunity lasts. Other coronaviruses can reinfect a human host within 1-3 years. But we’re still in the early days of the outbreak to know for certain. In addition, despite nearly every laboratory and scientists currently working around the clock to find both treatments and cures to tackle COVID19, we can only mitigate its impact on patients, not treat it in a targeted manner with the right medicines.

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Corporate DispatchPro That leaves us with a two year time window in which governments will have to balance the physical health of their populations along with the economic health of the country. These are both very important elements of the integrity of a country’s ability to function. On the one hand, governments should avoid relaxing measures which allow for the quick reopening of economic and social activities too soon, as this may prompt a second outbreak (which many epidemiologists have said is likely inevitable in any event), leading to another set of restrictive measures on citizens’ movement. On the other, national governments cannot maintain a closure of their economy indefinitely, as that would lead to mass unemployment and potentially government default in the medium term. That means that businesses, including but not limited to those in retail and catering would need to be allowed to reopen at some point.

That much is almost certain. But under which conditions?

• Will people be allowed to crowd in shops as they had done before?

• Will they have their temperature taken before entering the establishment?

• Must all customers wear masks prior to entry?

• How will items be disinfected before being put on the shelves?

• How will those who are infected with COVID19 be allocated sick leave?

Will it be a special sick leave, or taken from the standard sick leave?

• Will shops need to disinfect regularly?

Will employees need to be swabbed on a monthly basis to ensure they are not infected? Will the employer or employee pay for it? Or the government?

These are just a few questions that come to mind at present. Needless to say, we are in the early days of the COVID19 pandemic, and we have not quite entered the fallout/aftermath phase of it. That will come later. But we need to start thinking ahead about how we will all approach reengaging in social behaviour. That time will come, and we need to be prepared for a whole new world.

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Corporate DispatchPro NATHANAEL MUSCAT

Retailing to an ailing market There was a renewed sense of life over the weekend as shop owners returned to their stores to replace the cold-weather collections that were left hanging in their display windows since the lockdown was imposed at the end of March.

Five weeks later, we are starting a fresh chapter in the journey to overcome the coronavirus as the first set of closed retailers are allowed to roll up their shutters on condition of adhering to new safety measures.

Today, businesses are opening to a new reality that feels highly experimental. Controlled movement on the shop floors by customers donning gloves and masks only adds to that sensation.

But the changes in the market go deeper than forced behaviours: customers now visit with a different attitude.

For several weeks, we have been told that some businesses – and, by extension, some buying – is not essential. Authorities rightfully cordoned off those company categories that increased the risk of contagion without servicing basic needs, but the necessary measures meant that many retailers have been unfortunately tagged with the ‘non-essential’ label.

Shop owners already face a challenge to market their wares when much of the shopping experience is being watered down by vital social distancing rules. At the same time, the economic uncertainty will push down consumer confidence and reduce the very reasons for buying certain products. In this climate, people will think twice before slapping their contactless cards on the POS to acquire something they consider less than essential.

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Corporate DispatchPro Besides stimulating a timid market, retailers also have to navigate a delicate situation on the operative side of businesses. Staff will need to adjust to new schedules, practices and training; rents and outsourced services will have to be renegotiated. Stock is always a complication, but with disrupted supply chains and unpredictable sales patterns, shop owners have a tougher nut to crack.

The first week of business will be a bumpy learning experience for the retail sector. But, as businesses will have observed in other companies during the five weeks out of action, this period is also an opportunity to innovate and redefine their value offering. The success of the reopening will not be measured at the end of the week, nor the month, but when a new season of stability finally begins.

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Corporate DispatchPro TONIO GALEA

Burying the hatchet in times of coronavirus Almost four months since the start of the Covid-19 outbreak, the world is still getting to grips with a pandemic that has overturned every sphere: medical, social and economic.

Every country finds itself in a thick cloud of uncertainty during this unprecedented time.

Although governments are trying to collaborate in the fight against the coronavirus, the situation has also thrown them into competition over vital medical equipment and supplies. Moreover, there have been serious accusations and of diplomatic tensions leading to fears of new possible military conflicts. Nevertheless, the more optimistic are looking at the pandemic as a catalyst toward peace.

In March, United Nations Secretary-General António Guterres called for an immediate cessation of hostilities in all the world’s violent conflicts, allowing authorities to focus on the prevention of the spread and deal with the humanitarian consequences. His appeal started to gain some traction, but an immediate ceasefire in as many as 12 countries from the Philippines to Colombia is never going to be easy, let alone in these uniquely difficult circumstances.

There were some encouraging signs in the Yemen conflict, even if with dubious success, and a tenuous attempt in Afghanistan. The message fell on deaf ears in Libya.

Until going to press, the 15-member U.N. Security Council was expected to vote on a resolution that demands an “immediate cessation of hostilities in all countries on its agenda” as well as calls for armed groups to engage in a 30-day cease-fire. Such an ambitious resolution may not be expected to pass smoothly given the current and past tension between the member States, but we are living in extraordinary times and, without throwing caution to 53

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Corporate DispatchPro History has shown that even if a pandemic is not present at the time of going to war, military conflict creates accommodating conditions for the disease to flourish, both among armies and the civilian population.

the wind, there is room for hope. If the resolution is blocked, the impact on countries could be devastating.

War is expensive and a situation like the current crisis is damaging national economies, the ultimate source of military power.

Regardless of modern military technology, conflicts still require the engagement of bodies and nations can ill-afford the risk of losing more resources.

Military machines, as the French and American cases clearly illustrated, are not immune to the Covid-19 disease and a conflict would only expose armies to the possibility of a crippling contagion.

History has shown that even if a pandemic is not present at the time of going to war, military conflict creates accommodating conditions for the disease to flourish, both among armies and the civilian population.

Another factor on the minds of generals and is food supply. The United Nations gave a stark warning that the ongoing pandemic is endangering the world supply of foods, raising the possibility of a famine of “biblical proportions�.

Despite the challenges, there still is no guarantee that countries might not take steps towards armed conflicts; but fighting in these circumstances would certainly not produce any great victory parades afterwards. The coronavirus is fundamentally changing the way governments are thinking about national security, particularly because many health experts predict that this will not be the last pandemic the world will endure.

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Faculty for Social Social Wellbeing STUDY

Social Work Social Policy Youth Studies Community Development Counselling Gender Studies Criminology Disability Studies Gerontology Psychology Family Studies & Family Therapy

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Corporate DispatchPro PROFS. JOSANN CUTAJAR

Community People in general are social ‘animals’ so they tend to congregate in groups, communities (Social Wellbeing UOM) A community consists of a group of individuals or families that share certain values, interests, services, institutions, and/or geographical proximity. Fellin (2001) defines ‘community’ as a functional special unit that meets people’s sustenance needs, leads them to form collective identities, and facilitates social interaction.

Communities are not limited to neighbourhoods, but include professional groups, enthusiasts of a particular local, national, or global sport, diasporas, and/or online communities. Some communities are linked to a place, online ones are linked to a particular location in cyber space. Diasporas feel an emotional belonging to a geographic space which they might or might not have visited physically.

Netting, Kettner, McMurtry, and Thomas (2017) maintain that one of the characteristics of a community involves geographical proximity.

Geographical proximity used to be a factor but nowadays, thanks to ICT, proximity can also occur through cyberspace. In Malta we still tend to identify with certain places and the communities (religious, political, leisure) linked to certain neighbourhoods or towns. Although geographical parameters between one locality or another might be hazy in certain areas of Malta – the Qormi, Hamrun, Sta. Venera and Albert Town areas being a case in point – a good number of Maltese feel an affinity with one locality or another.

The Maltese like to use symbols to differentiate between communities, especially when these are found in the same locality.

In Żabbar, for example, residents who support the philharmonic club referred to as tal-Baqra use the colour blue to distinguish themselves from the community referred to as ‘ta’ San Mikiel’, which uses the colour green to demonstrate their allegiance to this band club. At the same time, they are united by their allegiance

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“Community is a point of reference where social identity is involved.” to their patron saint, il-Madonna tal-Grazzja (Our Lady of Graces) which serves as a totemic symbol, a social glue to hold the different factions within the same locality together in spite of secularization.

‘US’ AND ‘THEM’ Anthony Cohen (2001) underlines that we use the term ‘community’ when we want to identify between ‘us’ and ‘them’. Symbols are often used to differentiate between those who are considered insiders and those perceived as outsiders to the community. The Maltese use the term ‘iswed ’ when they want to underline that they are being socially excluded from something. This term is linked with the Roman Catholic religion since black symbolizes evil, the devil, sin, death, so it has negative connotations.

The term community implies that people who are part of the community have something similar to each other, while those outside do not. This sense of belonging leads to a sense of attachment to a group and/or place, which might eventually translate into involvement, and commitment. Members of parliament, for example, are very committed to their constituents, and this often translates into particular ministries employing quite a substantial number of people deriving from the area with which the minister or secretary is linked. For others, commitment means fighting for a cause. People have died in the name of ‘democracy’ or killed in the name of their ‘country’, two abstract concepts which feel very real for those involved. Cohen maintains that people construct community symbolically, rendering community a repository of meaning, and a resource at the same time.

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Corporate DispatchPro Community is a point of reference where social identity is involved.

Community activists within the LGBTIQ, disability, race and ethnic arena come together for a cause. Others come together because of an interest in sports, in politics, etc. While women tend to form part of groups involved in social issues, men tend to frequent football clubs, boċċi clubs, or band clubs. Putnam (2000) underlined that the activities based on the social identification with a place, interest or a cause help to consolidate social bonding. Social bonding leads to trust and reciprocity among disparate individuals.

COMMUNITIES AND SOCIAL FUNCTIONS Communities have social functions, one of which is the ability to respond to the needs of its members. The members’ needs can be addressed by resources found within the community. Lin, Cook, and Burt (2008) refer to this as collective efficacy. Neighbourhood watch is based on collective efficacy whereby community members look out for each other. Collective efficacy is a safety net for the socially excluded and the materially deprived (Cutajar, 2014). Life would be harder if community members did not share the few resources they have with each other.

Fellin (2001) maintains that community competence is enhanced when residents have a commitment to each other, are aware of their shared values and interests, are open in their communication, and participate widely in community decision making. This commitment to each other is being eroded through social, cultural and physical mobility, which is leading to fragmentation, alienation and disengagement according to Hardcastle, Powers, and Wenocur (2011). The Maltese have also been used to being ruled for centuries, by past colonial masters, by the Roman Catholic Church, by men. So, I think it might take time for the majority to catch up and realise that, by participating in decision making, they will make sure that their needs and interests are taken into consideration.

Not everybody is in a position to participate in decision making.

Communities delineate who can participate and who cannot.

Hardcastle et al. (2011) differentiate between horizontal and vertical structures. Horizontal structures are more apparent when the individuals involved share the same space, know each other, and therefore can take decisions together. Vertical structures involve 61

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hierarchical levels of authority which are found beyond the geographic boundaries shared by community members. In my research (Cutajar, 2018) on Gozo and Bormla, it was evident that distance from authority impacts on the community’s efficacy to access resources or to voice their concerns. Distance can be spatial or social and it can affect what Putnam refers to as bridging social capital, that is the groups’ efficacy to rope in the help of outsiders who have power. Gozitans are somewhat geographically removed from the centre of power. Bormla, as a ‘blighted’ locality, is socially removed (Boswell, 1994).

People’s feeling that they do not have a say in decision making or that their feedback does not count undermines cohesion and leads to fragmentation and alienation, maintain Hardcastle et al. (2011). This sense of alienation can lead to anomie or normlessness for people who do not feel that they belong in the ‘normative’ community. It is not only immigrants who might feel socially excluded, but all those who face social disenfranchisement, those communities who are made to feel different. And, in Malta, we are constantly coming up with ways of underlining who is part of a community, and who does not belong.

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Corporate DispatchPro SOCIAL ENGAGEMENT Communities have assets and capacities which are communally shared, and which people tend to take for granted until they disappear. The Legion of Mary volunteers are a case in point. In some communities, volunteers still pay home visits to the elderly and the lonely. This helps keep people feeling that they are part of the community and keeps them mentally healthy and socially engaged. Some communities help people cope and grow towards self-fulfillment. They help produce people who are functioning well physically, psychologically, socially, and spiritually. They produce people with little need for human services since community members will look out for each other.

Social turnover in some areas is what I feel is somewhat undermining this. Living in each other’s pocket is not healthy either. Internecine ‘warfare’ among professional groups or neighbourhoods undermines the group’s self-efficacy. We take community for granted until it starts going wrong. More research needs to be conducted on communities to find out what makes them efficacious, and what might undermine this efficacy.

REFERENCES Boswell, D. M. (1994). ‘The social prestige of residential areas’, in Sultana, R.G. & Baldacchino, G. (Eds), Maltese society. A sociological inquiry, pp. 133-162. Malta: Mireva Publications.

Cohen, A. P. (2001). The symbolic construction of community. London & New York: Routledge, Taylor & Francis.

Cutajar, J. (2018). Gozitan Women: a study on the transition from marriage into widowhood. The Gozo Observor, 37, pp 17-26.

Cutajar, J. (2014). Bormla: a struggling community. Malta: Faraxa.

Fellin, P. 2001. The community and the social worker. Itasca, IL: Peacock.

Hardcastle, D. A., Powers, P. R., & Wenocur, S. (2011). Community Practice: Theories and skills for Social Workers. New York: Oxford University Press.

Lin, N., Cook, K., & Burt, R. S. (2008). Social capital: Theory and research. New Brunswick, NJ: Transaction Publishers.

Netting, F. E., Kettner, P. M., McMurtry, S. L., & Thomas, M. L. (2017). Social work macro practice (6th ed.). Boston, MA: Pearson.

Putnam, R. D. (2000). Bowling Alone: The Collapse and Revival of American Community.

New York: Simon & Schuster.

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Corporate DispatchPro KEITH ZAHRA

CommuniqEU

Education and training The European Investment Fund (EIF) and European Commission are launching a new pilot guarantee facility to improve access to finance for individuals and organisations looking to invest in skills and education.

The EUR 50 million pilot scheme will support financing for students and learners, enterprises investing in the upskilling of their employees, and organisations supplying education and training. The Skills & Education Guarantee Pilot (S&E Pilot) is a new debt financing initiative dedicated to stimulating investments in education, training and skills – as part of the solution to get more people into jobs and to respond to the European economy’s changing needs.

In its pilot phase, the S&E Pilot will provide an EU guarantee of up to €50 million backed by the European Fund for Strategic Investments (EFSI), triggering debt financing for skills and education projects in Europe, with the aim of mobilising more than €200 million in total financing. Interested financing institutions or providers of education and training can apply to become financial intermediaries and participate in the scheme by responding to the open Call for Expressions of Interest published by the EIF. The selection of financial intermediaries is managed by the EIF. The EIF will provide a free-of-charge first-loss capped guarantee (or counter-guarantee) to selected financial intermediaries building up new portfolios of debt financing for students and businesses. Eligible students and businesses will be able to access different types of finance (e.g. loans, deferred payments, incomelinked loans, etc.) through dedicated financial intermediaries, such as financing institutions, universities, and vocational training centres, guaranteed by the EU. Ultimately, thanks to the guarantee, final beneficiaries will be able to access finance more easily and at better terms.

The initiative will be piloted in 2020 with the objective of becoming a mainstream European financial instrument after 2020, within the next EU multiannual financial framework (2021 – 2027). Capacity building support will also be provided by the European Investment Advisory Hub to help to promote the Pilot.

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Corporate DispatchPro KEITH ZAHRA

CommuniqEU

Air Travel In its judgement in a case brought by RyanAir against Italy’s Competition and Market Authority the European Court of Justice said that airlines are obliged to indicate in their online offers, from the first time that the price is shown (i.e. in the initial offer), the air fare and, separately, the taxes, charges, surcharges and fees that are unavoidable and foreseeable.

By contrast, it is required to indicate the optional price supplements in a clear, transparent and unambiguous way only at the start of the booking process. As regards, first of all, online check-in fees, the Court held that, where there is at least one option to check-in free of charge (such as physical check-in at the airport), those fees must be classified as an optional price supplement and do not, therefore, necessarily have to be indicated in the initial offer. However, if the air carrier offers one or several methods of checking-in that are to be paid for to the exclusion of any method of checking-in free of charge, those online check-in fees must be regarded as price elements that are unavoidable and foreseeable and must be shown in the initial offer.

As regards to the VAT applied to optional supplements relating to domestic flights, the Court held that that is an optional price supplement, by contrast with VAT applied to the air fare for domestic flights, which must be indicated in the initial offer.

Lastly, the Court held that the fees charged if payment is made by means of a credit card other than that approved by the air carrier, are unavoidable and foreseeable and must therefore be shown in the initial price offer.

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Corporate DispatchPro KEITH ZAHRA

CommuniqEU

Financial services The three European Supervisory Authorities responsible for financial services, namely the EBA, EIOPA and ESMA - ESA) have launched a consultation process seeking input on proposed environmental, social and governance (ESG) disclosure standards for financial market participants, advisers and products.

These standards have been developed under the EU Regulation on sustainability-related disclosures in the financial services sector (SFDR), aiming to strengthen protection for end-investors; improve the disclosures to investors from a broad range of financial market participants and financial advisers; and improve the disclosures to investors regarding financial products.

The SFDR empowers the ESAs to develop Regulatory Technical Standards (RTS) on the content, methodology and presentation of ESG disclosures both at entity level and at product level. In addition, the consultation paper contains proposals under the recently agreed Regulation on the establishment of a framework to facilitate sustainable investment (Taxonomy Regulation), on the do not significantly harm (DNSH) principle.

The principal adverse impacts that investment decisions have on sustainability factors should be disclosed on the website of the entity, and the proposals set out rules for how this public disclosure should be done. The disclosure should take the form of a statement on due diligence policies with respect to the adverse impacts of investment decisions on sustainability factors, showing how investments adversely impact indicators in relation to climate and the environment; and social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.

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Corporate DispatchPro MATTHEW BUGEJA

China, COVID19, and the future The novel coronavirus has impacted the overwhelmingly vast majority of countries and territories on the planet, with only a handful of countries so far saying that they are free from the pandemic. The country which has been most heavily affected by the COVID19 outbreak, from a geopolitical standpoint, is arguably China.

It was the country in which COVID19 seems to have originated, although, as yet, the global scientific community is still unsure as to how it made the jump from bats into human beings. That is something we will find at some point in the months ahead.

But for now, allow us to focus our gaze on China, the geopolitical and economic behemoth itself. Beijing’s power has been on the rise in the past decade or so, and arguably its role has grown even more prominent since the election of Donald Trump in the United States in 2016. With the United States seemingly taking a step back from global leadership, China, along with the European Union, have sought to fill the void - the EU due to necessity, and China rather enthusiastically. It had previously sought to expand its influence through economic ties with the One Belt, One Road Initiative and the Asian Infrastructure and Investment Bank, a Chineseled multilateral institution based in China, offering assistance to a number of countries that institutions, such as the World Bank, saw as not being in a position to meet their criteria for economic assistance. This has seen China’s influence grow considerably.

Then, sometime in early to mid-December 2019, the novel coronavirus made the jump to human beings, and proved to have all of the characteristics of a highly contagious virus. It spread through not only symptomatic patients, but also asymptomatic 71

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Corporate DispatchPro ones. The estimates of COVID19 carriers, based on numerous studies by national authorities, range anywhere from 20-50% of all those afflicted with the disease. In addition, the virus has an incubation period of approximately two weeks in which no symptoms would be displayed on the affected individual, but they would be able to potentially infect others. The Chinese authorities had first reported a strange new type of pneumonia to the World Health Organisation on New Year’s Eve, 2019.

As we know, the virus has spread like wildfire, thanks in no small part to modern aviation. By the time I wrote this in early May 2020, the global economy had ground to a complete halt, and in the span of three weeks some 23 million people registered for unemployment benefits in the United States, which was unprecedented. Needless to say, millions of people around the world have struggled to make ends meet, a number of them having lost their jobs, and governments have scrambled to provide economic assistance to companies in order to retain their employees until economies can be reopened once the pandemic is brought under control.

China, having been the first country to have been impacted by the virus, was also the first to emerge from it by beginning to reopen its economy. However, its international reputation had been tarnished to a degree, given that there have been accusations that it was not fully transparent with the WHO, and has also been accused of underreporting cases of COVID19. With scientists and mathematicians using data from China to gauge the impact of the virus on their countries, they were surprised when places like Italy and Spain surged past China’s infection numbers and death toll at some speed. Beijing’s credibility had come under severe fire as a result.

In order to help offset the damage done to his country’s image abroad, President Xi Jinping had approved the issuance of vast medical equipment aid packages to a number of countries in order to help restore some good will, and perhaps to help guide public discourse away from China being the centre of the COVI19 outbreak, and towards discussing China as a responsible global actor who will provide that assistance when needed. This has been partially successful, although some, including the US & EU, have called for 73

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Corporate DispatchPro investigations into the early stages of the outbreak. The White House, in particular, is keen to gain as much mileage from blaming China as possible, due to missteps by the federal government in the early stages of the outbreak in the United States.

China recognises that with its growing power and influence, it will receive more attention from the international community than ever before, as fragmented as that international community is. Its handling of the pandemic within China itself, at first glance, appears to have been strong enough to mitigate the outbreak. However, it also suppressed information, and had silenced a Chinese doctor who tried to blow the whistle on COVID19. China’s strong hand when it comes to information control has been costly for the international community, and to its image abroad.

COVID19 may also set China and the United States on a collision course at a much faster rate than otherwise would have been the case. This is an election year in the US, and you can expect President Trump to point the finger of blame at China on more than one occasion between now and November. China can respond in one of two ways: it can either ignore it, or in the realisation that Trump’s words are more about a domestic audience than a foreign one. Or it can respond as it has so far, with rebuttals, in part to minimise any further damage to its international standing. This would raise geopolitical tensions in a way that would not be conducive to a stable global system at a time in which the global economy is already in the doldrums.

The coronavirus has been a curse for China, but it can also be a blessing. If it finds itself able to steer public perception of its handling of the crisis to a positive disposition, China’s rise to true superpower status will be accelerated further. But if it finds itself caught in a geopolitical tussle with the United States, or a mere war of words that damages their relationship, it may find its reputation on the decline rather than the ascendancy. President Xi will need to be strategic to guide China to the next level, but he must also remember that sometimes, perception is everything.

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Corporate DispatchPro

From the Great Depression to the Great Lockdown.

WHAT CAN WE EXPECT FROM THE MALTESE ECONOMY? The dramatic changes that we experienced in the past couple of months shook our foundations, our expectations and even our definition of normality. A rare disaster, possibly not even a one-in-a-life-time event, has resulted in tens of thousands of lives lost, and the resulting social distancing, quarantines and lockdowns have quickly translated themselves into an economic collapse whose size and speed is unlike anything we had ever seen.

The only logical comparisons that economists and historians could attempt is the Great Depression of the 1920s, and without even investigating the nature of what happened back then, the name is enough to hint what is in store.

The worst thing about carrying out an analysis right now is the unknown. Not only we do not know how long the current situation will linger, but epidemiologists and health authorities around the globe refuse to exclude a second wave later in Autumn or perhaps early in 2021. Earlier this month, the International Monetary Fund headlined an estimate that world GDP will lose 3% in 2020. Yet, it only took some gloomier health projections in Europe and the US a few days later for its managing director to admit that this outlook “could be too positive�.

However, there is one important consideration that seemed to have gone out of all economic analysis. The pandemic, surely, brought the world to its knees. However, international markets, particularly the eurozone, were already looking at a bleak year before all this has started. Gone were the days of significant growth and while the 77

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European Central Bank was expecting a meagre 1.1% improvement, a number of economists were forecasting average growth that would not even reach the single figure, which would have constituted the eurozone’s slowest rate for at least seven years. The reasons for this sluggish growth varied from the uncertainty related to a potential hard Brexit and its consequences, the impact of escalating trade wars involving the US and potential geo-political flare-ups in the Middle East. China’s growth was also subsiding, leaving a deep impact on the rest of the word.

THE MALTESE SITUATION This was reflected to a certain extent in the outlook for the Maltese economy. In its pre-Covid assessment earlier this year, the International Monetary Fund (IMF) had noted that high valueadded services, namely tourism, financial services and remote gaming had allowed Malta to register significant growth rates which boosted employment. Growth rates far exceeded EU averages while unemployment and inflation remained low, the public debt ratio stood on a declining path, and the current account surplus remained sizeable.

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Corporate DispatchPro However, the Fund noted a significance dependence on foreign labour for economic growth as well as from the proceeds of the citizenship-by-investment (IIP) programme for financial stability.

After surging to 7.3 percent in 2018, real GDP slowed to 4.4 percent in 2019, with the IMF projecting a further decrease in 2020, before the arrival of the deadly pandemic. Exports, an important contributor to production of wealth in Malta, were also expected to shrink due to weaker demand from Malta’s international partners. Moreover, the large influx of foreign employees was putting significant pressure on Malta’s infrastructure besides creating a number of social issues which requires addressing.

In its report, the Fund noted a number of needs which were required to support the economy, among them filling infrastructure gaps, improving public investment efficiency as well as addressing labour shortages and housing affordability will help mitigate bottlenecks associated with high growth and promote social inclusion. It also called on greater attention to governance issues, particularly on money-laundering issues, an area in which Malta continues to score low marks.

The Fund concluded that growth was gradually converge to its potential rate of slightly above 3 percent as the most dynamic sectors reach steady-state and total factor productivity and population growth.

While this analysis hint at the direction the Maltese economy preCovid, a later assessment taking into account the current crisis, the Fund projected the Maltese economy to shrink by 2.8% this year, while bouncing back with a very strong 7% in 2021. While the IMF expects a number of jobs to be lost, it indicated that in consideration of the job support measures implemented so far, it was not expecting unemployment to exceed 5%.

This assessment sounded quite optimistic in view of the current situation where so many business are staring at a complete standstill – 40% of them small businesses have told the SME Chamber in a recent survey that there activity came to a complete halt. This suspicion tended to receive support when an assessment carried out by credit rating agency Fitch, painted a significantly gloomier forecast, with a 5.9% contraction expected this year, with next year’s 79

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Corporate DispatchPro rebound not exceeding a moderate 3.6%. In its analysis, Fitch did also highlight that its forecast was generally optimistic, based on the assumption that the economy will get back to a normal level of activity the second half of the year as the impact of the virus subsides.

Fellow credit rating agency Moody’s prediction lies somewhere in between the two, expecting a contraction of 3.8% this year and a growth of 3.2% in 2021. Fitch also insists in highlighting an important disclaimer, that the extent and duration of the restrictions on activity could be greater and longer-than-expected, especially if Malta or its trading partners extend their lockdown periods. In that scenario, Fitch expects a larger decline in output in 2020 and a weaker-thanexpected recovery in 2021, which could have negative repercussions for growth prospects and public finances over the medium-term.

On the positive side, all assessments welcome the health authorities’ response to health risks and the mobilisation of our healthcare system, while the announced economy measures should “soften” the impact of the shock on the domestic economy. In terms of Malta’s financial position, while all assessments note that the country’s position starts from a relatively healthy starting point, the expenditure required to support businesses and jobs will inevitably throw our numbers back in the red.

Fitch estimates the general government balance to deteriorate to a deficit of 8.2% of GDP in 2020, from a surplus of 0.8% in 2019, based on the operation of automatic stabilisers and the direct budget impact of close to EUR600 million (4.5% of GDP) from the government measures. Lower spending and a rebound in economic activity would partly shrink the deficit in 2021 to 5% of GDP. It also forecasted general government debt to increase to 55.7% of GDP in 2020, from an estimated 43.4% in 2019. Government has publicly indicated the need for up to EUR2 billion (15.1% of 2019 GDP) in borrowing 2020, which is largely in line with Fitch’s expectations.

The extent of the increase in public borrowing this year, and the pace at which it will happen remains uncertain, and crucially depends on the time it will take for economic activity to return to pre-pandemic levels. Fitch notes that Malta will inevitably emerge from this crisis 81

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Corporate DispatchPro with a higher level of public debt, but positively notes that its generally healthy position, including consecutive fiscal surpluses between 2016 and 2019, means it is better prepared than quite a number of European partners in consolidating public finances over the medium-term.

The take home from these mixed messages is that doom and gloom scenarios have been ruled out, particularly if activity resumes to a degree of normality in the latter half of this year. Still, troubles abound, and they are not necessarily home-grown. Speaking to a local newspaper earlier this month, John Naudi an experienced entrepreneur in the field of oil and gas, noted that the biggest threat to European economies including ours, lays in the situation of large countries such as France, Spain and Italy, who have been hardlyhit by the crisis and have little room for manoeuvre in terms of spending. They are large economies – two of them members of the G7 – with huge interdependencies with their wider neighbourhood.

They provide a big chunk of tourists visiting Malta every year. In this context, John Naudi calls for a stronger European financial effort to support these two economies, warning that “These are not Greece.

Europe must realise that if they go down, many others will go down too.”

The different assessments analysed above also come with a number of recommendations that should be heeded by the local authorities as Malta prepares itself for a rebound that eventually is due to happen. These include structural reforms which sustain a growthbased performance which is not short-term as the dependency on foreign workers, particularly through investment in long-term education, upskilling of workers, the stimulation of innovation and the promotion of social inclusion.

Such moves will strengthen Malta’s position at the start of a new race which will undoubtedly re-commence as soon as this terrible phase sets over. Malta needs to ready itself with the right tools to achieve first-mover advantage as soon as engines start moving again, to ensure that the impact of the current crisis is as short-lived as realistically possible.

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