Business Agenda Issue 05

ISSUE 05 I DEC - FEB 2011

business 3.7 agenda THIS ISSUE

NEWSPAPER POST Gender equality The Gender pay gap – how can it be bridged?

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POLICY

The EU’s Innovation Union Policy aims to spur economic growth and job creation.

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THE Official Business publication of the Malta business Bureau

AUSTERITY MEASURES IN EUROPE ARE NECESSARY AND WILL BE BENEFICIAL IN THE LONG RUN In an interview with this newspaper, Malta’s Prime Minister, Dr. Lawrence Gonzi has expressed his opinion that the austerity measures being taken by a number of European countries are necessary and will help them to get their economies back on the right track.

EU AFFAIRS How the European Economic and Social Committee safegaurds business interests.

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He acknowledges the possibility that such measures are likely to affect the local economy, but will

SR TECHNICS A major investor in Malta’s aviation sector.

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EU CITIZENS WORKING in MALTA INCREASE BY 800 PER CENT SINCE MEMBERSHIP According to statistics compiled by the Employment and Training Corporation (Malta), the number of EU citizens working in Malta has increased significantly in the first six years of EU membership, amounting to over an 800 per cent increase.

CASE STUDY The development of Smart City Malta.

Available statistics show that in 2004, the year Malta joined the EU, there were 597 EU citizens working

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in Malta, while by the third quarter of 2010, this figure had increased to over 4,800 workers. The data also shows that the number of EU citizens working in Malta increased substantially each year, with the only exception being recorded between 2008 and 2009, when a decrease of six per cent was registered.

See page 7 for the full story.

benefit Malta in the end, considering the deep economic and trade ties that the country shares with its European neighbours.

The Prime Minister also reiterated his stance with regards to fiscal consolidation, stating that this, along with job creation, must be Malta’s priority for the coming year.

See page 5 for full interview.

“THE STABILITY AND GROWTH PACT IS AS GOOD AS DEAD” WITHOUT PROPER ENFORCEMENT MEP Prof Edward Scicluna has stated that the euro area’s Stability and Growth pact is “as good as dead” unless there is proper enforcement and an agreed set of sanctions and incentives to go some way to prevent a future economic crisis.

MEP Prof Scicluna voiced this opinion while speaking to BusiSee page 15 for the full story.

ness Agenda about the state of Europe’s economic governance.

He also stated that Europe needs a permanent crisis resolution mechanism which, according to him, the current Stability and Growth pact does not provide.

He stated that without these measures the survival of the euro area would be uncertain.

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editorial

Making the best of opportunities

By Joe Tanti, Chief Executive Officer, MBB

Maltese business is committed to the Single Market In recent weeks, the re-launch of the Single Market has taken preeminence on the EU’s agenda. The European Commission is in fact inviting all interested stakeholders to submit their views on the relaunch of the single market and in particular on the prioritisation of the 50 measures proposed in the Act. On the basis of the input received, the Commission plans to adopt a definitive action plan for 2011-2012.

In November, through the support of the European Parliament Representation Office in Malta, I had the opportunity to attend the first public hearing on the future direction of the single market policy at the European Parliament.

The Single Market Forum was also addressed by MEP Louis Grech who played a key role in submitting innovative ideas that helped shape the final programme of proposals unveiled by Internal Market Commissioner Michel Barnier.

The message conveyed during the forum was clear - strong political commitment and leadership is needed to implement the Single Market Act. The plans need cooperation from European governments – without full engagement of governments nothing can actually happen.

Former European Commissioner Mario Monti, who was entrusted by

President Barroso with compiling an in-depth report on the relaunch of the single market, was somewhat critical at the EU leadership's lack of full commitment towards the single market, saying that “the Single Market initiative is not the EU flagship initiative, because the single market itself is not the flagship. But it is the sea and wind which allows all the other flagships to proceed”.

On the local front, this new political approach to single market policies will undoubtedly exert a longterm impact on the development of local enterprises. Indeed, the MBB has taken a proactive approach on the subject and is already well engaged in the discussions on the priority items that should constitute the Commission’s action plan. An exchange of views was recently held with Parliamentary Secretary for Small Business, Jason Azzopardi, taking this opportunity to inform Government on the main expectations as well as the issues of concern emanating from the “Single Market Act”.

Maltese business welcomes the broad scope of the “Single Market Act” and its overall objective of revamping the European Single Market. Nonetheless as MBB President John A. Huber rightly pointed out “the key stress of this new package of initiatives should be on the

implementation and enforcement of existing Single Market legislation”.

Malta’s accession in the EU has been beneficial for business. It created an obvious shift in the operating environment of Maltese business, presenting considerable opportunities but also a number of potential competitive threats. While there are still critical issues with regards to the single market for goods that need to be addressed, the cross-border facilitation of business services remains even more inadequately developed, despite the slow but steady implementation of the Services Directive across the EU. The business community is committed to play a key role on the evolving discussions and eventual implementation of the Single Market Act. The MBB is convinced that such healthy debate will help develop a coherent and cohesive national stand on the 'Single Market Act'. In the coming weeks, we intend to study further the impacts of the Commission proposals on the business community and publish our reactions in a Position Paper that will be presented to the Maltese Government and DG Markt respectively.

Finally, on behalf of the President, the Board of Trustees and the

executive team at the MBB, I would like to wish you all a Merry Christmas and a prosperous New Year.

2011 will be a special year for the MBB, being that the organisation will be celebrating its 15th anniver-

sary. We look forward to continuing to build on the work that has been done so far in the best interest of the local business community.

The Malta Business Bureau is a non-profit making organisation acting as the European Advisory and Support Office of the Malta Chamber of Commerce, Enterprise and Industry and the Malta Hotels and Restaurants Association. The MBB has two offices, the Head Office in Malta and the Representation Office in Brussels.

Publisher Content House Ltd Mallia Buildings 3, Level 2 Triq in-Negozju Mriehel QRM3000 Tel: 00356 2132 0712/3 Email: info@contenthouse.com.mt www.contenthouse.com.mt

Malta Business Bureau Casa Leone Pjazza Robert Samut Floriana Tel: 00356 2125 1719 (Malta Office) Tel: 0032 4859 81124 (Brussels Office) Email: info@mbb.org.mt infobrussels@mbb.org.mt www.mbb.org.mt

Editor: Joe Tanti Deputy Editor: Claire Azzopardi

Editorial Team: Omar Cutajar, Daniel Debono, Mariella Scicluna

Business Agenda is the quarterly publication of the Malta Business Bureau. It is distributed to all members of the Malta Chamber of Commerce, Enterprise & Industry, all the members of the Malta Hotels & Restaurants Association, and to all other leading businesses

by Mailbox Distribution Services, part of Mailbox Group. Business Agenda is also distributed by the Malta Business Bureau to leading European and business institutions in Brussels.

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interview

“We have performed well...”

– Prime Minister Lawrence Gonzi

As Europe’s smallest Member State, Malta’s economy and policies are deeply tied with those of its European neighbours... and 2010 has certainly been a challenging period for all. PRIME MINISTER LAWRENCE GONZI speaks to CLAIRE AZZOPARDI about Malta’s economy, the future of the euro and government’s vision of securing Malta’s economic competitiveness.

There can be no denying of the fact that many European governments have been through a rollercoaster ride in the last 12 months, faced with the task of ensuring that their economies are given a fighting chance to shake off the effects of the global financial and economic crisis.

Some have certainly fared better than others in this respect, but Malta’s Prime Minister exudes an air of quiet confidence as he talks about his country’s economic performance throughout this year, stating that overall, 2010 has been a positive year for the local economy.

“Although there have been a number of national and international issues that have strongly influenced our political decisions and of course, the country’s economic performance, I am happy to say that, all things considered, we have performed well,” he states when asked about his opinion on the country’s economic performance over the last year.

However, the Prime Minister swiftly follows this positive analysis with a word of warning, saying that “we must not forget the fact that our economy is intrinsically and deeply tied to what is happening on the European level. Given the vola-

tile state of affairs that is currently unfolding, we should be very cautious. We must not allow ourselves to become complacent... rather, we should strive harder to ensure that we retain our competiveness.”

Given the economic situation across Europe and the challenges that are being faced with regards to European economic governance, the survival of the euro has also been cast into doubt. The Prime Minister states that with a sound vision and the implementation of well thought out measures designed to bring about financial and fiscal consolidation in these currently weak economies, he is confident that the euro and the euro area will survive this crisis and be all the stronger for it.

“The reality of Europe’s situation is that we experienced the worst crisis in the last century and some Member States are still carrying the burden of those banks that had to be bailed out,” he says. “European and global economies have not adjusted to the measures that need to be taken to achieve fiscal and financial consolidation.”

The Prime Minister goes on to say that, in his opinion, the austerity measures being taken by a number of countries are necessary and will help them to get their economies

back on the right track. “Ultimately, while these measures are likely to affect us now, they will benefit Malta in the end if our main trade partners manage to stabilise and strengthen their economic situation,” he says.

“We can only move forward if our trade partners are in a good position, so we need to support them.”

including tourism, health, education, Information Technology and financial services, amongst others. “We are moving quite well on all areas,” explains Dr. Gonzi. “The IT and financial services sector are performing particularly well, and manufacturing has also shown signs of significant improvement.”

He continues to explain that one of the major factors that will help to ensure that Malta retains its positive economic performance is competiveness and its own fiscal consolidation. “Our actions and decisions in the last few months have given priority to fiscal consolidation, bring our deficit down ... it is an essential aim and I am confident that we can achieve it in 2011.”

“Nevertheless, other sectors that have been earmarked for development through Vision 2015 still need more work,” he explains.

“For example, in the education sector, there is a strong demand for skills and we need to invest more in vocational courses, while in the health care sector we need to continue working on the plans that have been developed in the last months in order to reap the benefits of the planned reform in primary healthcare.”

But while Malta is taking measures of fiscal consolidation and is keeping a close eye on developments folding throughout the EU, and the euro area in particular, the Prime Minister explains that the country will continue to press on with its planned reforms and strategies that were designed to ensure greater efficiency and to create job opportunities.

In fact, Vision 2015 is a five-year strategy that, if it goes according to plan, will bring about development in seven sectors of the economy,

Malta’s Vision 2015 fits in nicely with the EU 2020 strategy. The major objectives of both strategies include competitiveness and the creation of jobs, and Prime Minister Gonzi maintains that government’s policies are perfectly complementary to those of the EU. “The identified seven sectors that are included in Vision 2015 are the ones we believe possess the most potential for job creation and if we

achieve all our targets we could really be in the front of the class when it comes to the sustainable development of these economic sectors,” he explains.

Of course, attaining these objectives is a long-term goal, but what are the Prime Minister’s expectations for 2011? “I believe we need to continue with our strategy to achieve fiscal consolidation and the creation of more employment opportunities in Malta,” he states. “We will also be focusing on making the public sector more efficient ... we need to take a look at our expenditure levels and we need to increase efficiency and value for money.”

“But I do have a message for the local business community - be optimistic about the future... we have fared well and we are capable of achieving success. We do need courage to accept change where necessary, but we need to make strategic investment decisions and look to the future. I am confident that we can achieve what we set out to,” he concludes.

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FEATURE

EU CITIZENS WORKING IN MALTA INCREASE EIGHTFOLD IN THE LAST SIX YEARS Statistics compiled by Malta’s Employment and Training Corporation show that the number of EU citizens working in Malta has increased substantially since the country joined the Union. CLAIRE AZZOPARDI takes a closer look at subject and finds out what trends have been established in recent years.

According to statistics kept by the Employment and Training Corporation, the number of EU citizens working in Malta has increased by over 800 per cent since Malta became and EU Member. According to available data, there were a total of 597 EU citizens working in Malta in 2004, the year when Malta

joined the EU, while over 4,800 EU citizens were registered as working on the island by the third quarter of 2010, translating into an eightfold increase in just 6years.

The data also shows that with the exception of the period between 2008 and 2009, EU citizens work-

ing in Malta continued to increase steadily each year, with a registered increase of 28 per cent between 2005 and 2006, 36 per cent between 2006 and 2007, 33 per cent between 2007 and 2008 and 26 per cent between 2009 and 2010. The only reduction was registered between 2008 and 2009, where the num-

ber of EU citizens working in Malta dropped by around 6 per cent.

The influx of foreign workers who are citizens of one of the 27 EU Member States is likely to be a result of the opening up of Malta’s borders to EU workers, in keeping with the fundamental principle

of freedom of movement that all EU citizens and worker across the Union can enjoy. According to EU law, persons holding a passport that was issued by any EU Member State are entitled to not only to reside but also to work in Malta, without restriction.

This state of affairs led to the need to establish a dedicated mechanism that would coordinate and facilitate the movement of workers within the Union. Mr Raphael Scerri, Senior Manager within Malta’s Employment and Training Corporation explains that “since the freedom of movement of workers is one of the fundamental rights of the European Union, the Commission set up the European Employment Services to promote such right amongst its citizens, and Malta joined the EURES services in 2004 when it became a fully-fledged Member State.”

“In fact, since Malta’s accession to the EU, we have organised a number of activities ranging from Recruitment Days for specific employers to Job Days,” he continues. “We always had quite a good number of participants asking for information and meeting our advisors. Maltese workers looking for careers in another EU Member State have shown interest in a wide variety of sectors, including the education, transportation, medical and aviation sectors.

While EU citizens are free to seek employment in Malta, they are legally obliged to obtain a residence permit and an employment license issued by the ETC, before they actu-

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FEATURE ally undertakes employment in Malta. This licence is required no matter the duration of the worker’s area of employment, but some exceptions, such as when the person in question is seeking employment in the public sector.

Yet, while statistics are available for the influx of EU workers, none exist for the outflow of Maltese workers to other EU Member States. This lacuna has limited government’s ability to identify any sectors that may have suffered a brain drain following EU membership. This situa-

tion will, in turn, limit the relevant authority’s ability to develop adequate policies to address any existing problems of the sort.

However, Mr Scerri does not believe that the ‘outflow’ of Maltese workers to the EU has caused any problems within the local economy. “Although there might be a brain drain in some occupations, I still think that most of the Maltese who work abroad return back to Malta with more skills, knowledge and experience,” he concludes.

FACT BOX: EU Citizens working in Malta: YEAR

EU CITIZENS & DEPENDENTS

2004

597

2005

1,767

2006

2,259

2007

3,072

2008

4,082

2009

3,860

2010

4,854

(Q3)

Self employed EU citizens in Malta – 700 EURES

(European Employment Services) EURES brings together the European Commission and the public employment services of the countries belonging to the European Economic Area and Switzerland, along with other regional and national bodies concerned with employment issues, such as trade unions, employers' organisations, as well as local and regional authorities.

The purpose of the EURES network is to provide services for the benefit of workers and employers as well as any citizen wishing to benefit from the principle of the free movement of persons.

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analysis

INVESTING 3 PER CENT OF EU GDP IN R&D BY 2020 COULD CREATE

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MILLION JOBS – EU Commissioner, Marie Geoghegan-Quinn

By Krista Micallef Trigona

The EU’s ‘Innovation Union’ sets out a strategic approach to innovation, facing challenges such as climate change, energy, food security, health, ageing population and also social innovation, and, according to EU Commissioner Marie Geoghegan-Quinn this could create substantial economic growth and job opprtunities.

The Commissioner explains that the world’s current economic order has brought about a number of challenges, in a relatively short time. It is widely agreed that for Europe to compete and ‘keep up’ in this changing environment, it must become more innovative and respond more effectively to consumers’ needs and preferences.

In response to this need, the Innovation Union initiative sets out a strategic approach to the challenge of promoting innovation, focusing Europe’s efforts and cooperation on challenges such as climate change, energy and food security.

It also aims to improve framework conditions and access to finance for research and innovation, which can then be turned into products

and services, stimulating economic growth and job creation.

“Our strategy aims to create an Innovation Union which combines a world class science base, with coherent, Europe-wide use of public sector intervention to stimulate the private sector and remove bottlenecks which stop ideas from reaching the market,” EU Commissioner, Marie Geoghegan-Quinn explains.

The Commissioner points out that “studies show that, investing 3 per cent of EU GDP in research and development by 2020 could create 3.7 million jobs and increase annual GDP up to €795 billion by the year 2025.” And this, she anticipates, can be much higher if the rest of the measures in the strategy are taken into consideration.

Currently, the EU has proposed seven research framework programmes, with the eight research framework programme coming into force in 2014. “This will be designed as a spearhead of the Innovation Union, with sustainable jobs and growth as well as tangible environment and health benefits as

the overarching aim,” Ms. Geoghegan-Quinn says, adding that it will also mean less red-tape than ever before.

Furthermore, the Commission wants to build on the success of the European Research Council, funding excellent individual scientists for ‘frontier’ research projects and will also reinforce its own scientific base for policy making through its Joint Research Centre.

Taking a look at the local level, Dr. Nicholas Sammut, Vice Chairman and CEO of the Malta Council for Science and Technology, states that in order to achieve the Innovation Union’s aims, science, technology, research and development need to be strengthened.

“The realisation of the European Research Area is a crucial element in this regard,” he explains. “This would enable researchers, institutions and businesses to circulate, compete and cooperate without borders. The aim of the Area is to give all players a seamless European-wide open space, where knowledge circulates freely and

where synergies and complementarities are fully exploited.

“Though it is envisaged that the realisation of the Innovation Union Initiative will improve Europe’s capacity and outputs in science, technology, research and development, it is still very difficult to gauge the impact of the Innovation Union as yet, given that as a Communication, it was only published last October and a first set of Council Conclusions are currently under discussion,” he discloses.

Furthermore, the Innovation Union strategy will also target public and private sectors working together. “The key word today is partnership,” the Commissioner states, “the Innovation Partnerships will each focus on a specific societal challenge where, Europe can improve the lives of its people and become a commercial world leader and will have concrete and measurable goals. They will also be co-driven by political, industrial and scientific stakeholders,” Ms Geoghegan-Quinn says.

In addition, the Commission envisages a Steering Board of

which will include national Ministers, MEPs and key stakeholders, thus funding will be supported by European, national and also private means. “Partnerships will act on the regulatory and demand sides, as well as the supply side. They will, for example, help fast-track regulation and standards and deploy coordinated public procurement to create lead markets,” she says.

The first pilot partnership will be launched in early 2011 and will be focused on active and healthy ageing. “The aim will be to increase the average number of healthy life years by two, by the year 2020 and will thus reduce strain on social security and health budgets and will also help create an EU and global market for innovative products and services, offering new opportunities for EU businesses,” she conveys.

“All in all, the Innovation Union is conceived as Europe’s first ever strategic approach to research and innovation, and implementing it will not be easy. Above all it needs 100 per cent commitment from the highest political level and we are asking heads of state and government for that,” she concludes.

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INDUSTRY

THE EU’S INTEGRATED INDUSTRIAL POLICY EU Commissioner for Enterprise and Industry, Mr. Tajani recently unveiled the much-anticipated approach to industrial policy. The Commission paper emphasises the need for the long-term sustainability of industry in the European single market. OMAR CUTAJAR, MBB's Permanent Delegate in Brussels, discusses the policy with the local business community.

Much has been written by market analysts and policy-makers alike that the EU’s industrial competitiveness is fast-weakening to the point that the overall attractiveness of the EU’s internal market as a location for foreign direct investment is eroding to the advantage of emerging economies. The novelty of the EU’s industrial policy in addressing the competitiveness challenges facing industry is to overhaul the fragmented and sector-driven policies framing the policy-setting against which legislative and regulatory decisions are enacted at both EU-level and member-state level.

The Commission’s flagship initiative on industrial policy delivers a clear and concise riposte to the competitiveness-related issues at stake. EU industry policy has to be an integrated and a co-ordinated one whereby aspects of environmental sustainability, the upgrading of skills, resource-efficient management, better regulation and research and development support schemes have to be conceived and tailored to the needs of industry concurrently. The challenges facing the various industrial sub-sectors are common and consequently a universal thematic-driven approach should be pursued.

A WELCOME INITIATIVE WITH CONCRETE FOCUS ON COMPETITIVENESS In this respect, Maltese business retains that the general focus of the Communication is correct since it is comprehensive in its scope whilst addressing a number of key messages that the Malta Chamber has been lobbying for. “The thematic approach on the factors considered crucial for the sustainability of industry in Europe along with the overall message that industry should be given the central importance it deserves in the economic make-up of member-states’ economies in order to generate growth and employment, are the main positive attributes of the Commission’s new industrial policy,” according to Ing. Ray Muscat, Director-General for Sectors and Business Development at the Malta Chamber.

A similar assessment is delivered by Mr. Anton Borg, MBB Board Member and the Managing Director at J.B. Plastics Ltd who opines that “industry, particularly manufacturing must be given centre stage not only at European level but in the economies of the individual EU countries”. Other industry operators in Malta believe that indeed the EU’s new industrial policy comes at a timely moment for decision-makers to take concrete and decisive action to salvage industrial competitiveness. The Deputy CEO at Toly Malta and Chairman of the Malta

Chamber's Manufacturing and other Industries Economic Group, Mr. William Wait believes that “Europe was falling asleep whilst a large portion of its manufacturing industry was moving operations to other countries outside the EU, which are offering a better competitive operational environment than what EU member-states are offering”.

Many concur that the international financial and economic crisis has spurred EU decision-makers to rethink their perspective on the vital role that industry plays in the overall economic wellbeing of EU member-states. The role and economic contribution of industry, especially manufacturing industries, is often underestimated. “When one considers the number of other industries reliant on the success of the manufacturing industry, such as freight, transport and logistics services, then the contribution of GDP originating from the manufacturing sector increases exponentially,” explains Mr. Anton Borg.

It is with this overall view in mind that the repeated call for attention by operators in the industrial sector should be heeded with a sense of political urgency. “Market competitiveness will ultimately decide the fate of EU industry and short-term help in the light of the economic crisis can only be forthcoming for a limited number of years”, comments Mr. Wait.

“However, a pro-business environment should and can be introduced whilst sustained for as long as there is political goodwill”, argues further Mr. Wait. An appeal for targeted support is also expressed by Ing. Muscat who recalls how the Communication stresses that “a new Industrial Policy should identify ways of how industry should be assisted in view of post-crises acceleration of international competition vis-a-vis the BRIC countries”.

MAKING THE NEW EU INDUSTRY POLICY DELIVER Easing the regulatory burden on industry is therefore one straightforward way of alleviating the operational shackles hindering growth. “Both competitivenessproofing and the evaluation of EU and national legislation through the introduction of ‘fitness checks’ are welcome suggestions”, commends Mr. Wait whilst highlighting that the success of regulations is not directly proportional to the number of new legislative initiatives being proposed and ultimately introduced into the statute books.

The fresh approach to EU Industrial Policy as announced by the Communication rotates around the commitment that all EU policy proposals with a significant effect on industry should undergo a thorough analysis for their impacts on competitiveness. These “fitness checks” will assess whether the regulatory framework for a policy area is fit for purpose and, if not, what should be improved.

Besides curtailing ‘red tape’, the Communication deals with a few other longstanding issues of concern to industry. From a Maltese business viewpoint, the availability and access to credit is also key and of specific relevance to the Maltese scenario where seed capital is hard to find. The EU’s new Industrial Policy acknowledges that the modernisation of Europe’s industrial base and the infrastructure on which it relies will require substantial new investment, entailing more private capital for productive investments, in particular through venture capital markets.

In this regard, Mr. Wait comments that “in Malta, we need to ensure that the adoption of the ideas presented in the Communication would need to be tailormade for the particular needs of our industry.” Facilitating access to finance is not only useful to support industrial endeavours on the domestic markets. Indeed, as Mr. Borg explains, support to SMEs “in accessing credit is crucial for expansion and assistance in finding the right niche for the internationalisation of their products and services”.

HOW CAN THE EU’S INDUSTRY POLICY BE MOST RELEVANT FOR THE MALTESE INDUSTRIAL SET-UP? Maltese business has no qualms about the added-value that an EU Industrial Policy brings to national policymaking covering this diverse sector. “The Commission’s initiative is very relevant to Malta and some of the key actions contemplated, such as the transport and energy initiatives are actually of greater concern to a small island-state like Malta than to larger economies,” elaborates Mr. Borg. “To a large extent, the Commission Communication could be cascaded into a reinvigorated Industrial Policy for Malta”, adds Ing. Muscat. The thematic approach underpinning the EU’s Industrial Policy is perhaps the most attractive proposition from the Maltese industrial standpoint.

“Maltese industry policy should depart from the focus on specific sectors and adopt a more thematic approach to support measures,” asserts Ing. Muscat.

Certainly the EU’s Industrial Policy could serve as a blueprint for revamping the current Industry Policy for Malta which dates from 2006.

Malta’s leading industrial stakeholders have clear ideas about the trajectory and scope that a comprehensive update of this policy would bring. For Mr. Wait the key word is ‘support’. “Support is needed in all ways possible...from incentives to re-position our industry into the areas which are deemed to be of high-value added, to internationalisation schemes, to a ground-breaking shift inculcating innovation within the daily operations of industry,” explains Mr. Wait. The small business focus of such support schemes is not lost on Ing. Muscat’s view that “such support should not be limited to funding schemes, but that in the case of SMEs, this should involve hand-holding services to enable the achievement of targets.”

Maltese industrial enterprises cannot move up the value chain unless they can benefit from a skilled labour force aptly trained with the right educational qualifications matching up to the demands of employers. The manufacturing industry is an attractive work proposition for many low-skilled workers, however in order to withstand the competitiveness challenges from lower-cost locations whilst simultaneously moving up the valuechain, it is paramount that education curricula are re-focused on the skills needs of modern industry.

“Higher levels of education need to be attained by first-time job seekers who have not completed tertiary education, otherwise the manufacturing sector will find it difficult to move up the value-chain,” cautions Mr. Borg.

There is a consensual view amongst Maltese business that the new EU Industry Policy will help re-position industry and its various sub-sectors to the centrefold of political awareness at both community and national level. Despite the increasingly-dominating strength of the services sectors in European economies, including Malta’s, the relationship between industry and services is a mutually reinforcing one. “The EU must acknowledge that the manufacturing industry needs the services sector for its freight, transport etc but that conversely the services business necessitates the manufacturing industry for its custom,” explicates Mr. Borg.

A sound European macroeconomic policy should envisage a healthy mix of economic activities within the overall matrix of productive activities generating growth and jobs. “In Malta, we dispose of a relatively well-balanced GDP

"Europe was falling asleep whilst a large portion of its manufacturing industry was moving operations to other countries outside the EU" Mr. William Wait Deputy CEO at Toly Malta and Chairman of the Malta Chamber's Manufacturing and other Industries Economic Group

"Manufacturing industry must be given centre stage not only at European level but in the economies of the individual EU countries" Mr. Anton Borg, MBB Board Trustee and the Managing Director at J.B. Plastics Ltd

“The thematic approach on the factors considered crucial for the sustainability of industry in Europe are the main positive attributes of the Commission’s new industrial policy” Ing. Ray Muscat, DirectorGeneral for Sectors and Business Development at the Malta Chamber

comprised of manufacturing, tourism, financial services, construction and the public sector. With a share of around 16 per cent of GDP, the manufacturing industry needs to be given the attention it deserves,” recalls Mr. Wait. “Industry should not be sidelined as an economic sector that is past its 'sell by date'. Doing so, would be a grave mistake,” warns Ing. Muscat.

Indeed, increasing productivity in manufacturing industry and all its associated services is essential for sustainable economic growth in an ever-more competitive global marketplace.

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interview

EUROPEAN ECONOMIC GOVERNANCE:

THE WAY FORWARD The governance of European economies has come under major scrutiny in recent months, with claims that the euro zone is even facing a crisis of survival. Is this really the case? What steps need to be taken to instill greater sustainability in our economic model? MEP PROF EDWARD SCICLUNA speaks to CLAIRE AZZOPARDI about these major challenges and their potential solutions.

Q. A great deal has been

Q. The severe economic

A.

Yes, I do. I believe that the survival of the eurozone is at stake if the issues outlined above are not rectified and changes implemented.

said and done when it comes to the main weaknesses and challenges of Europe's economic governance. In your opinion, what are the key weaknesses that need to be addressed as soon as possible?

One of the main weaknesses faced by the euro zone is that it does not in fact fulfill all the requirements which are necessary for it to be considered as an ‘optimal currency area’, as suggested by economic theory. Unlike the United States, there is just not enough mobility of workers due to language and cultural obstacles, and it lacks a centralised federal fiscal framework. As a consequence, the macro-economic imbalances which could be remedied by such a framework, are instead supposed to be prevented by the Stability and Growth Pact (SGP). The crisis has shown that this simply has not happened. In fact, these imbalances have actually widened and got worse.

Q. The euro area's

Stability and Growth Pact is the EU's main budgetary surveillance framework do you think that it remains fully valid in today's economic reality? How could it be improved? Do you see this happening any time soon?

A. In my view, the main weakness

in the SGP lies in the fact that it has never been properly enforced.

Ten years ago, the two dominant euro zone countries - Germany and France - breached the rules on excessive deficits and debt, but were not punished. The same has happened now. In the past two years we have had a situation where 26 Member States have faced an excessive deficit procedure.

We need proper enforcement, perhaps with an agreed set of sanctions and incentives to countries to go some way to prevent a future crisis, otherwise the SGP is as good as dead. However, we also need a permanent crisis resolution mechanism which the SGP, in its current form, does not provide. It is these issues the European Parliament will spend the coming months working on.

difficulties being faced by a number of European states, particularly Greece AND Ireland, have led to comments about this being a time where the survival of the euro area is at stake. Do you agree?

A.

Q. What lessons can be

learned by the current state of affairs in such states?

A.

There are certainly a number of lessons to be learned, primarily that any take-it-or-leave-it plan as the past SGP does not work effectively for the reasons I mentioned before. A combination of macroeconomic imbalances, government spending that was consistently higher than revenues, and a lack of European economic governance has caused these problems. The crisis in the eurozone is a common one and one which requires solidarity and an acceptance that mistakes have been made and must now be rectified.

Q. Although they exist on

paper, do you think that sanctions, or stronger sanctions, for Member States that fail to adhere to budgetary requirements/ standards would be enough to keep them 'on track'?

A. No, I do not agree that sanc-

tions, on their own, would be enough. In fact, there is a serious danger that strict sanctions, with no incentives to Member States, could promote pro-cyclicality and make the problems in some countries even worse. As Mahatma Gandhi famously said, "an eye for an eye makes the world blind". Both MEPs and government ministers would do well to remember that.

Q. There have also been

some warnings of a double dip recession in some EU Member States - do you think these were alarmist statements or is there a valid warning to be heeded in this case?

A.

I think it would be foolish to rule out the possibility of a double-dip recession in some Member States.

Such talk is not alarmist but pragmatic. It is already occurring in Greece and in Ireland as well.

In the past year, it has become the political fashion to pass massive austerity budgets at a time when most EU countries have weak economies. We do not and cannot know whether our economies will be able to withstand public spending cuts and the risk of a rapid increase in unemployment.

Q. The severity of the

recession in some states has been partly blamed, on too much leniency in the way in which financial institutions made lending and investment decisions.

How can this 'attitude' be prevented from recurring in the future?

A. Taxpayers across Europe are, rightly, very angry that large banks, unlike other businesses, were bailed-out using enormous sums of public money for the simple reason that, despite the recklessly speculative actions some of them had taken, they were 'too big to fail'.

We cannot allow such a situation to happen again. So, for example, we have to address the question of 'living wills' so that, if a bank gets into serious trouble in the future, the core of the bank and its customers' savings are protected, while the speculative and investment arms are allowed to go bankrupt.

Moreover, we have already taken action at EU level to tackle the issue of excessive bonus payments to financial institutions and are currently discussing the future regulation of the derivative markets and the issue of short selling and credit default swaps, both of which played a part in the crisis.

Our financial institutions need to understand that the purely laissez-faire approach of the past generation has been tried and almost brought about a total economic collapse. The culture of short-termism and risk taking and very high leveraged positions must be replaced by a more sustainable sector where rewards match medium and longterm profitability.

Q. With regards to the

economic governance of EU and euro area Member States, what main

developments do you expect to take place throughout the coming year?

A.

Before I answer what developments I expect to see, I want to point out that what is worrying to me is that the package of crisis and preventative measures proposed so far by the European Commission are entirely devoid of any clear link to the fundamental questions of job creation, the EU's competitiveness in a global marketplace and any linkage of this with the EU's 2020 strategy.

I hope that we can establish a new, effective system of economic governance for the euro zone and the non-euro zone countries. We need a stronger preventative arm, through better budgetary surveillance and accurate economic statistics and forecasting, a corrective arm that combines both effective sanctions and incentives and a permanent crisis resolution mechanism so that government leaders and the markets do not descend into a blind panic when a country gets into a serious financial crisis.

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EU AFFAIRS

GENDER PAY GAP

REMAINS A PROBLEM Research and statistics show that there is still a significant gap between the hourly earnings of men and women.

MARIELLA SCICLUNA discusses how this gender pay gap can be bridged.

The gender pay gap is the average difference between men’s and women’s hourly earnings within the economy as a whole. Across Europe, women earn on average 17.8 per cent less than men and in some countries the gender pay gap is actually widening.

Estimates recently published

by Eurostat show that there are considerable differences between Member States in this regard, with the pay gap ranging from less than 10 per cent in countries such as Italy, Malta, Poland, Slovenia and Belgium, to more than 20 per cent in Slovakia, the Netherlands, Czech Republic, Cyprus, Germany, United Kingdom and Greece, and figures exceeding more than 25 per cent in Estonia and Austria.

The gender pay gap also has an important impact on lifetime earnings and on women's pensions. Earning lower pay results in having a lower pension and this causes a higher risk of poverty for older women. The gender pay gap is the consequence of ongoing discrimination and inequalities in the labour market which, in practice, mainly affects women. This issue is linked to a number of legal, social and economic factors, which go far beyond the single issue of equal pay for equal work.

Although the European Union has always acted as a pioneer

of pay equality, the gender pay gap remains an unsettled issue, with an average hourly pay gap between women and men at 18 per cent while on an annual basis at 24 per cent.

In relation to this situation, the Belgian Presidency has taken under its cap the responsibility of giving an impetus and a renewed importance to equality on the place of work, particularly as how to go about it and by proposing and implementing a strategy. Thus, in its six-month programme the Belgian Presidency has declared that the Council will adopt conclusions on the basis of the communication by the Commission relating to the new strategy on equality between men and women (2011-2015).

The conference brought together two hundred and fifty participants from various national governments, corporate partners, civil society, European institutions and academia. Discussions on possible responses to the salary gap issue, at both European and national levels, in the context of the Europe 2020 strategy took place. Examples of effective national practices aiming to counteract causes identified for the salary gap were also proposed.

Amongst others for instance, the United Kingdom carried out policy actions and research on the factors

behind the gender pay gap. This research showed that the drivers of the gender salary gap are complex and multi-faceted, and therefore it is difficult for one to demonstrate that any one action directly influences this critical matter, thus diverse actions for diverse issues are required. On the other hand, the Czech Republic included measures in a general government action plan for gender equality which has been updated periodically since 1998. The Czech government also instructs ministries and other central administrative bodies to carry out specific measures in order to promote gender equality.

The ultimate objective of the conference was to establish guidelines for action and concrete commitments towards the elimination of the pay gap in the European Union, which will be included in the conclusions to be adopted by the EPSCO Council in December of 2010. This initiative is part of the presidency’s aim in view of the EU2020 Strategy to increase employment rates of men and women aged between 20 and 64, up to 75 per cent by 2020.

To do so, would require a dramatic increase in the employment rate for women, which at present stands at 63 per cent in the European Union, while tending towards the essential principle of equal pay.

In relation to this, the conference

Conference Proposals for Action: • the implementation of national action plans to reduce the pay gap; • the effective implementation and enforcement of equal pay legislation; • ensuring transparency for salaries and fringe benefits; overcoming stereotypes and the elimination of vertical and horizontal segregation; reconciliation of private and professional lives; integrating targets in the National Reform Programmes; and • empowering social partners in order to decide on targets, improve the quality of women’s employment, implement concrete actions, and insert gender equality in collective bargaining.

ended with proposing 10 major axis principles.

On behalf of the local business community, Kevin J. Borg, Director General at the Malta Chamber, stated that the European Union's objectives to promote better equality in incomes across genders, is very commendable. The action plan laid out is exhaustive and ambitious.

He claimed that attaining the ultimate objective for Malta will be hindered by the potential increase in maternity leave, as well as for the fact that the country continues to lack adequate family-support structures such as temping agencies and child-care facilities that extend beyond normal office-hours.

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FEATURE

BRIDGING THE GAP BETWEEN

SOCIETY AND THE EU

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Business News MBB Update

The European Economic and Social Committee is the EU institution that ensures that the views of civil society are taken into account when the EU drafts and implements new rules and regulations. BUSINESS AGENDA speaks to EESC Member STEFANO MALLIA about the role and functions of the EESC and what main topics are on the Committees agenda throughout 2011.

The European Union is often perceived as being a maze of legislation, policies and process that can sometimes be quite intimidating to navigate. Yet there are mechanisms that have been in place for years to ensure that the different viewpoints that characterise a democratic society are given due consideration within the Union’s decision-making institutions. In fact, the European Economic and Social Committee (EESC) is quite unique in that it is an official EU institution which however represents Europe’s social partners and civil society.

Just a few months ago, Mr Stefano Mallia was recently appointed as one of Malta’s representatives to the EESC and one thing is for sure, it’s certainly keeping him busy. “The EESC is essentially the consultative body of the European Union,” he explains. “It brings representatives of employers, trade unions and civil society together, with the aim of ensuring that the views and needs of these different sectors are

adequately represented within the Commission and the Parliament, through the EESC’s feedback and advice on the proposals submitted by these institutions.”

While the EESC brings three main social sectors together, it is also made up of six separate sections that tackle issues related to society, the economy, trade, transport and foreign relations, amongst others.

Malta is the least represented of all the EU’s Member States within the EESC, with just 5 members, who have to divide their time between the numerous meetings held by each group. Within the EESC there are a number of sections and Mr Mallia is a member of the Internal Market Section, the Economic and Monetary Union Section and the Agriculture and Environment Section.

In addition to these he is also a member of a number of study groups that are purposely set up to study specific issues such as the

EU’s budget, the Common Agricultural Policy, the regulation of Credit Agencies etc. “I’ve just been appointed on two very important study groups. One will be reviewing the EU Budget for the period 2014-2020 whilst the other will be discussing the future of the EU Cohesion Policy. They are two topics which could have a direct bearing for Malta and therefore I’m looking forward to getting involved in the debate.”

“There are various issues that the EESC is currently working on at sector-level, where a detailed opinion and report is drawn up by the assigned rapporteur and which is then tabled at plenary,” he continues to explain. “Once the sections give their opinion on a given topic, it is presented at plenary and all representatives give their own input, following which the EESC’s official stand is concluded and can then be put forward to the Commission, the Parliament and the Council.”

But while the organisational framework of the EESC is fairly straightforward, how exactly does it work? “Although it does not have any legislative or decision-making powers itself, it does give a voice to social partners and civil society in each different Member State.

Of course one has to be realistic in terms of what can actually be achieved but I think the EESC has a very unique role and this gives us the opportunity of influencing the EU decision-making process, ” explains Mr Mallia.

“This is achieved by conducting detailed research amongst the audiences that it represents on the various polices and proposals that are often drawn up by the European Commission. In addition, the view of the EESC must also be sought, by law, in a number of areas before a proposal is presented by the Commission to the European Parliament and or Council for its consideration,” he continues.

4th November –

EU law-making procedures

However, the EESC does not necessarily have to wait for a proposal to be put forward by the Commission or another EU institution to seek the EESC’s opinion and guidance. Matters that are felt to be of importance to the representatives sitting on the EESC’s sections can also put items on the agenda and kick-off the process of developing what is referred to as an ‘own initiative opinion’.

“At the moment, there a number of issues that the EESC is focusing on in particular, including the reform of the Common Agricultural Policy, the upcoming 2014 – 2020 Budget and last, but certainly not least, the creation of employment,” Mr Mallia points out.

“But civil society and the business community can also make their voice heard by contacting their relevant representatives, making them aware of the impact that certain laws, polices or proposals are having on their daily lives,” he continues. “This channel of feedback and communication is essential to the EESC’s work, as ultimately, the Committee is there to represent the needs and views of civil society.”

This is one reason why Mr Mallia has decided that the EESC’s profile in Malta needs to be raised.

He believes that not enough people really understand the EESC’s functions and role and, therefore, the Committee cannot fulfil its full potential when it comes to representing Maltese civil society at European Level.

“Although I was only appointed representative to the EESC a few months ago, I plan to work on raising its profile locally throughout my five year term,” states Mr Mallia. “It will take a great deal of hard work and, given the system, it will also take some time before tangible results can be seen. I think we are incredibly lucky in that one of the Vice-President’s of the EESC is Anna Maria Darmanin and this will help in raising the profile locally. I intend to work closely with nationallevel institutions, including the Malta Business Bureau and I am sure that Maltese society and the Maltese business community will soon begin to use the EESC to their advantage.”

25th to 26th October – Belgian Presidency Conference on Gender Equality in Brussels MBB Executive Mariella Scicluna was nominated by BUSINESSEUROPE to be one of its two representatives to attend the conference on Gender Equality, discussing prospects on how to close the gender pay gap, organised by the EU Belgian Presidency. The conference brought together 250 participants from various national govern-

ments in charge of gender equality policies, as well as from corporate partners, civil society, European institutions and academia. During the conference, examples of effective national practices aiming to counteract causes identified for the salary gap were proposed, while , Ministers and institutional representatives voiced their proposals

and perspectives for the future. The objective of the conference was to establish guidelines for action and concrete commitments towards elimination of the pay gap in the European Union, which will be included in the conclusions adopted by the EPSCO Council in the end of 2010.

28th to 29th October –

HOTREC 61st GENERAL ASSEMBLY IN BUDAPEST MBB CEO Joe Tanti and MHRA CEO George Schembri attended the 61st General Assembly of HOTREC, (a confederation of 40 hotel, restaurant and café associations from 24 different European countries), which was held in Budapest. The General Assembly discussed the challenges faced by the European hospitality industry and the state of recovery following two years since the outbreak of the worst economic crisis in recent years. HOTREC members had the opportunity to hear the proposals from the European Commission on a new political framework for European Tourism, which was presented by Mr. Mattia Pellegrini, a member of the Cabinet of Vice-President Tajani’s Commission. The General Assem-

bly was also addressed by Mr. Kent Nyström, HOTREC President, who stressed that the Commission was responsible for ‘providing oxygen’ to the industry through the establishment of a sustainable framework for tourism businesses, especially

during this recovery period, as the future of thousands of jobs in hospitality enterprises in Europe are at stake. The next HOTREC General Assembly will take place in Zurich on 11-14 May 2011.

6th November – MBB participation in EP's forum for citizens on Maternity Leave Debate

The Malta Business Bureau was invited to participate in a forum for citizens organized by the European

Parliament’s representation in Malta. The MBB was represented by its CEO, Joe Tanti, who participated on the panel discussion alongside MEPs Simon Busuttil and Edward Scicluna, Vice President of the National Council of Women Doreen Micallef, Entrepreneur Marlene Mizzi and Childbirth Educator and Doula, Marianne Theuma. The debate reflected the

vote on the Estrela Report regarding maternity and paternity leave, which was recently approved by the European Parliament.

CEO Joe Tanti referred to the impact assessment that was published by the MBB in recent months and highlighted that raising maternity leave from 14 to 20 weeks will increase the costs on the economy

Nadya Papagiorcopulo attended a seminar on behalf of the MBB, which was organised by MEUSAC in collaboration with The European Commission Representation in Malta. The conference tackled the ‘Co-decision Procedure’ – one of the legislative processes within the EU. Dr Vanni Xuereb, Head of MEUSAC, explained that the EU was discussing and implementing post-Lisbon Law, a procedure that includes the involvement of the two main legislative bodies in the EU: the Council and the European Parliament. The Commission retains a central role in this procedure since it initiates all legislation in the Union. Once a law is adopted and published on the EU journal, it is forwarded to the Council and National Parliaments. As a result of Lisbon Treaty, National Parliaments now have the important role of practicing the principal of subsidiarity, whereby decisions are

taken at levels close to citizens. This way, the EU retains a strong element of inter-governmental approach.

As expressed by key note speaker, Dr. Peter Agius, a European official at the General Secretariat of the Council, the concept of co-decision could possibly delve into its practical organisation, by examining the ways in which legislators make up their respective political positions and how they influence each other and negotiate the respective positions into an acceptable compromise for both legislators and the Commission.

Nadya Papagiorcopulo is a European Documentation Research Centre (EDRC) second year student reading for a Bachelor Degree in European Studies (Hons.) who has undergone a traineeship at the Malta Business Bureau.

5th November – Promoting 'COST' in Malta Bernardette Borg attended a conference on behalf of the MBB held at the Malta Council for Science and Technology (MCST). This conference, entitled ‘Promoting COST in Malta’, dealt with European Cooperation in Science and Technology.

The central objective of COST is to strengthen Europe in Scientific and Technical innovation through the assistance of cooperation and interaction between European researchers.

Dr Nicholas Sammut, Chief Executive Officer of MCST, claimed that Research and Development (R&D) funds rose by 6 per cent since the original allowance of €300,000. COST is one of the collective European research programmes, which covers a spectrum of different research topics. A significant role carried out by COST is that of establishing a European Research Area (ERA) with the consequence of enhancing European integration. Dr Thierry Giger, who works at the COST office in Brussels, gave out a detailed

by about €12 million annually. This puts on further pressure on already over-burdened businesses that will have to shoulder the major impacts of the directive, at a critical time when public debt should be reduced not increased further.

He proposed that instead, government, the business community and civil society ought to look

description of COST governance and the provision of funds to management committees and working groups, scientific workshops, short term scientific missions, training schools and disseminations. Furthermore, COST has the capacity to create networking groups and has a potential role in increasing economic growth.

During the same conference, an analysis carried out and presented by the German COST assembly concluded that even though Malta’s investment in R&D per capita exceeds that of other countries, its participation rate in COST actions is still significantly low. Hence, participation in COST actions is strongly encouraged.

Bernardette Borg is a European Documentation Research Centre (EDRC) final year student reading for a Bachelor Degree in European Studies (Hons.) who has undergone a traineeship at the Malta Business Bureau.

beyond the maternity leave issue and instead work towards more effective mid and long-term solutions, focusing on most critical issues, namely to enhance female participation in the workforce, the better upbringing of children, and a better work-life balance.

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MBB Update

9th November –

Public Hearing on the Future of Single Market Policy MBB CEO Joe Tanti and the MBB’s Permanent Delegate in Brussels, Omar Cutajar, attended the first public hearing on the European Commission’s Single Market Act proposals in Brussels. Many MEPs were present at this hearing together with Internal Market Commissioner Michel Barnier, Professor Mario Monti, Belgian Federal Minister for the Internal Market Vincent van Quickenborne, and Belgian State Secretary for European Affairs Olivier Chastel.

Among others, this public hearing was addressed by Maltese MEP Louis Grech, who is the author of a report setting out recommendations for the Commission’s Single Market proposals.

The discussion delved into the urgency of moving the single market ahead in the European agenda.

The Act is being kept aback from starting its legislative process and further consultations are being pushed instead. It was finally argued that even though there may be disagreements along the way, at least it is important to have a direction. The Single Market Forum is set to become an annual event bringing together single market stakeholders. The next forum will take place in autumn 2011 in Poland during the first Polish Presidency.

Mr. Tanti’s visit was supported by the European Parliament Representation Office in Malta.

15th November – CAP towards 2020 Nicholas Vella attended a seminar on behalf of the MBB on the Communication from the Commission on “The CAP towards 2020,” organised by the DG Agriculture.

The Common Agricultural Policy (CAP) nowadays is confronted with a set of challenges, some unique in nature, some unforeseen, that invite the EU to make a strategic choice for the long-term future of its agriculture and rural areas. In preparation for this Communication, the Commission organised an extensive public debate earlier in 2010 that was concluded in July 2010. In the overwhelming majority of views given during this public debate it was concurred that in the future, CAP should remain a strong common policy structured around the two pillars. Dr. Leonard Mizzitalked about the CAP reform path and also the challenges it is faced with, such as food security, envi-

ronment and climate change, and territorial balance. He also delved into the budgetary reform that will come into force in 2014, and on the future of the CAP which would include: (i) the introduction of further gradual changes to the current policy framework; (ii) making major overhauls to the policy in order to ensure that it becomes more sustainable and that the balance between difference policy objectives, farmers and Member States is better met; and (iii) focusing on environmental and climate change objectives, while gradually moving away from income support.

Nicholas Vella is a European Documentation Research Centre (EDRC) second year student reading for a Bachelor Degree in European Studies (Hons.) who has undergone a traineeship at the Malta Business Bureau.

22nd November – Kick-off meeting for AMIE project

1st December – MBB Board Meeting with Parliamentary Secretary Hon. Dr. Jason Azzopardi MBB President and Board of Trustees had a special meeting with the Hon. Dr. Jason Azzopardi, the Parliamentary Secretary responsible for Small Business and Lands, with an exchange of views on the “Single Market Act” – the European Commission’s political programme for re-launching the European Single Market. The proposed Single Market Act carries a total of 50 proposals, with the majority having clear and exclusive pertinence to business, whilst a large cohort of other proposals would indirectly help business thrive in the internal market through the expected targeted resolution of protracted consumer and citizens’ concerns.

MBB president, Mr John A. Huber

2011 for other Entrepreneurs who might be interested in becoming Ambassadors. The associated partners namely, the Malta Chamber of Commerce, Enterprise and Industry, the Malta Hotels & Restaurants Association (MHRA), Ministry of Finance, the Economy and Investment (MFEI), and Malta National Contact Point (CIP), have pledged to offer their support towards the AMIE project. The project launch was held in Brussels on the 8th and 9th December, for which the ten selected ambassadors attended.

icy decisions on specific issues arising from the Single Market Act at EU level. Dr Azzopardi said that the Single Market is Europe’s strongest competitive advantage which translates into benefits for businesses, citizens and consumers alike. An ever more dynamic and competitive single market, contributes to higher employment and growth, on the path of achieving the ‘Europe 2020 Strategy’ goals, in the light of the challenges all member states are currently facing. He also praised the MBB for its sterling work in promoting the country’s entrepreneurial sector, stating that it was a fine example of Malta’s active role in civil society and EUrelated issues.

3rd December – Submission of ESF Project Proposal The Malta Business Bureau (MBB) and the Malta Council for Economic and Social Development (MCESD) partnered with the Malta Hotels and Restaurants Association (MHRA) in the submission of an ESF Project Proposal entitled a ‘Maltese Network for Tourism Development (MNTD).’ This network will form a steering committee that will provide the MCESD with clear positions on the local tourism industry in respect to EU matters.

The MBB has a mutual interest in supporting one of its parent organisations, the MHRA, in building technical capacity on EU matters concerning the tourism indus-

Mariella Scicluna attended the first meeting of AMIE on behalf of the Malta Business Bureau in participation with the other partner organisations in the project.

These include the project leader: Foundation for Women Entrepreneurs (FWE), along with the other partners being: Reach Beyond Foundation (RB), National Council For Women (NCW) and the Malta Association of Women in Business (MAWB). This list of the ten Entrepreneur Ambassadors was officially pronounced and it was decided that an open call will follow in February

emphasized the fact that the local business community is concerned with a number of issues, including matters such as copyright protection, the EU patent, the implementation of the Service Directive and of the Small Business Act in Malta, the regulation of electronic commerce, the revision of the Energy Tax Directive, harmonized taxation and European Market Surveillance. He later pointed out that the MBB would like to see how business organisations can work closer with Government in joint business-government initiatives for the benefit of local enterprises and also highlighted the importance of having healthy exchange of views that will contribute towards future public pol-

try. The MBB will be using its pool of information and resources to help in developing such studies that will lead to the creation of a network on tourism development for a more efficient running of the industry.

Thus, the MBB together with the MCESD, will assist in the requirements and surveillance of the envisaged studies. While the MBB will be providing updates from Brussels in relation to the themes of these studies, the MCESD will be providing any technical & logistical support required by MHRA for this project.

This project, if selected, will bring in a social and civil dialogue targeting, amongst others, policy reform and regulating procedures on family friendly measures, tourism marketing, accessibility and competitiveness, innovation and entrepreneurship, and better information thanks to scientific studies promoting a more effective social and civil dialogue in Malta.

The aimed research is in line with contemporary topics, with one study being specifically on innovation such as eco-friendly solutions, improvements in ICT, and developments in business management.

UPCOMING EVENTS

Next edition of Business Meets MEP's The next edition in a series of events entitled Business Meets MEPs organized by the MBB is set to take place between the end of January and beginning of February 2011. The upcoming event will see the local business community meet with MEP David Casa, who will be interviewed by a local journalist, and then moderate an open forum of Q&As and an open-floor debate subsequently. Business will

discuss with MEP David Casa the working progress on the Committees he is on, his recent report on the simplification of VAT rules and the forthcoming rapporteurship he will engage on in early 2011.

RE-SCHEDULING OF EVENT WITH MEP LOUIS GRECH. Following our communication with our members on the post-

ponement of the third edition of Business Meets MEPs with MEP Louis Grech on the Relaunch of the Single Market, the MBB will be scheduling this meeting for March 2011 soon after the public consultation by the Commission on the Single Market comes to an end. Further coverage and information about the events can be obtained by logging onto our website: www.mbb.org.mt

BUSINESS AGENDA | DEC – FEB 2011

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case study Content House, composed of Content House (Advertising & PR), Content House (Publishing) and Content House (Investments) is one of the leading media companies in Malta. Founded in 2004 and with a staff complement of 17 dedicated employees on its books, last year Content House moved to larger, modern offices in Mriehel to cater for its existing and ever-growing business. Content House (Publishing) is responsible for some of Malta’s leading magazines and Content House (Advertising & PR) is an established communication agency and the local agency for Scholz & Friends, one of the largest advertising agencies in Europe.

This year Content House received the ‘Country Representative 2010’ award by the prestigious European Business Awards.

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SR TECHNICS LANDS IN MALTA SR Technics, a leading global provider of Maintenance, Repair and Overhaul (MRO) within the aviation industry, has recently set up a base in Malta. KRISTA MICALLEF TRIGONA finds out more about the establishment and development of this major player in the aviation industry.

Joining other well-established names within Malta growing aviation cluster, including Lufthansa Technik, Rolls Royce, MCM and Medavia, SR Technics offers total solution packages to airlines, including maintenance works such as aircraft checks, engine overhaul or component management and repair through a vast network of maintenance facilities.

Malta was jointly selected by both SR Technics and EasyJet, one of Europe’s low cost airlines, as well as the company’s base load customer, in which SR Technics ensured a long term contract servicing all EasyJet fleet. However, the company has also started to market its capacity for third-party customers.

Having set up a base in Malta, the operation will allow SR Technics to deliver its superior MRO services from its new, exceptional platform and will also considerably increase its competitiveness in the labour intensive airframe maintenance segment.

In fact, the firm is currently also focusing on a successful ramp-up of their operations in Malta, part of which includes an extensive recruitment and training program, which will be maintained according to SR Technics’ brand standards, certifying the quality and operational standards for the Malta maintenance operation.

However, prior to deciding on Malta as an aircraft maintenance facility base, SR Technics took into consideration 53 different locations across Europe. “The decision to establish further operations in Malta was driven by a number of important considerations,” explains Karin Freyenmuth, Head Corporate Communications, at SR Technics.

Indeed, as Ms Freyenmuth points out, Malta holds a number of positive traits, which enticed SR Technics to set up a base here, and invest in its development even during one of the worst economic recessions.

“For starters, there are a significant number of potential customers within a four hour ferry flight radius, the country has lower labour

costs in comparison to other European countries and holds a potential workforce with the relevant skills and qualifications that are available locally,” she explains.

But that is not all. She explains that Malta’s stable political and financial environment, coupled with the potential for SR Technics to expand its operations in the future, were also key determinates, as was the immediate capacity enlargement to fulfill customer requirements through an existing hangar.

“Malta proposes a platform to offer SR Technics’ customers, world-class quality at highly attractive rates and our facility in Malta also allows SR Technics to increase

its competitiveness in the labourintensive airframe maintenance segment,” she explains.

Earlier this year the company commenced operations at an existing hangar at the Malta International Airport, but the new facility is set to be inaugurated in early 2012.

Following long talks and agreements between SR Technics, Malta Enterprise and Malta Industrial Parks, the construction of the new maintenance facility will consist of a four-bay maintenance hangar and workshops, and will thus allow the maintenance facility firm to carry out base and heavy maintenance services on narrow-body aircraft.

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case study

Having set up base here, SR Technics have already employed 124 Maltese workers by the end of October 2010, and it is expected that by the year 2014, through the creation of four-bay hangars, SR Technics will result in the development of up to 350 jobs. Indeed, through the Malta College of Art, Science and Technology (MCAST), and Malta’s Employment and Training Cooperation (ETC), the partners will also provide employee education and training, in close collaboration with SR Technics’ own training organisation.

Undoubtedly, recent years have not been easy for airlines and the aviation industry in general, but SR Technics have managed to withstand the challenges by strengthening their core areas. “SR Technics has taken the chance to strengthen its core competence to offer our customers the highest quality and exceptional safety standards,” Ms Freyenmuth states.

“We have improved our overall efficiency and significantly strengthened our customer service, resulting in reduced TAT (Transcontinental Air Transit) for example. As part of the Mubadala MRO family we were able to invest in new services and capabilities and to tap synergies within the network, and we are currently expanding our capabilities and business. For example, we are developing the Piece Part Repair Business, and plan to offer new financial services through our sister company Sanad, and have just opened a new Technical Training Centre in Abu Dhabi,” she says.

However, the aviation industry will continue to be a very competitive market, and in order to retain their competitive edge within the industry, SR Technics is focusing on a number of initiatives. “Geographic expansion to enable profound customer value creation and cost leadership; development of new core capabilities to differentiate SR Technics in the market, for example, engineering capabilities and logistics processes; as well as the new service packages tailor-made to our customers' needs, such as financing solutions for components and engines in cooperation with our sister company Sanad,” Ms Freyenmuth says.

Over the years, SR Technics has shaped its capabilities to fit a growing worldwide trend among airlines in which they will be able to have some or all of their aircraft, engine or component maintenance

services presented in tailor-made packages. SR Technics, have thus addressed this trend by establishing global solutions and enabling customers to entrust the technical management of their fleet in the hands of their maintenance partner.

“ Malta is an attractive place for a project like ours because it has so much growth potential” – Jin Choi As Executive Director of Strategy and Business Development of Smart City (Dubai), JIN CHOI has the challenging task to steer one of the biggest investment projects ever received in Malta to completion and to make it fully operative. DANIEL DEBONO spoke to Mr. Choi to explore the major developments of the project, how it intends to integrate within the local business community and how it could benefit from Malta’s EU status.

Jin Choi carries the major responsibility of overseeing the development of Smart City Malta (SCM), one of the biggest foreign investments ever received in the country. This comes at a critical time when Malta is undergoing economic recovery following the international financial and economic crisis that was experienced recently.

Mr. Choi has been appointed to the post of Malta’s Country Director of the Smart City project just over a year ago, and during this time he feels that the expectations he had prior to taking on the job are materialising.

potential. Locations where growth is stagnant or has already peaked are not appealing. The impressive resilience of the Maltese economy amid the global recession, especially in the Mediterranean region, shows the importance of investing in a country with growth engines and that is on a growth path.”

He explains how throughout the last twelve months his team met many interesting businesses and came to firmly believe that the potential of Malta is real. “With the first product and deliverables handed over in October, much of the vision has come into effect and even more can be achieved from now on.

We are looking forward to the year 2011,” he explains with enthusiasm.

With regards to the real potentials of SCM itself, Mr. Choi argues that, “Smart City Malta will be the platform where opportunities are networked across different regions.

We’d like businesses to learn about opportunities in different parts of the world through our network and the networks of our business partners.” He is convinced that with the self-sustained leading business district, with the incomparably superior ICT infrastructure and fast tract government services all along the breath-taking Maltese shoreline, Malta’s position as a centre of excellence in the region will be strengthened.

tese business partners and EU firms to expand to the Middle East.”

ations, and our Smart City’s presence in Malta fulfills this mission”.

The media in Malta has created some hype on the extent of the financial investment this project brought to our shores and the numbers of employment it will eventually generate. But what does Smart City Malta mean for the Maltese business community?

Mr. Choi also hopes to see more Maltese businesses attract counterparts from overseas and to promote Malta as a business destination.

“The Maltese business community and its growth will create the snow ball effect, and we’d like to be part of the team” he states.

In order for Malta to attract such a large foreign investment, it surely is required to be competitive in its neighborhood, in this case, in the Mediterranean region. When asked about what makes the island competitive enough to attract such projects, Mr. Choi claimed that “Malta is an attractive place for a project like ours because it has so much growth

“It will mean we can grow together” Mr. Choi answers. “We’d like Maltese businesses and foreign businesses to benefit from their own network and strengths. Maltese businesses can be excellent partners for foreign businesses to enter Libya for instance. Our business partners in Dubai can be an excellent stepping stone for Mal-

With regards to Malta’s EU status, that provides market access to a large economic bloc, Mr. Choi recognizes that Smart City Malta opens up tremendous new opportunities for the Dubai-based investors. He claimed that “interacting with companies in the EU or companies in need of expanding to the EU is an important asset for our global oper-

On another aspect of being present in an EU member state that is gaining the momentum to achieve the goals set by the EU2020 Strategy in particular with respect to R&D and Innovation, Mr. Choi highlights the fact that this is a very important issue for Smart City Malta. He argues that “R&D is a cost centre and therefore it’s difficult to attract or internally nurture. However, more innovation can be encouraged when more commercial opportunities are attracted and more workers are exposed to more sophisticated operations and projects. Smart City Malta will look to facilitate and create the right environment.”

“The appointment truly expanded my horizons. It was fulfilling to witness that the values our team is developing are beginning to be felt, and we are moving a step closer to the common vision,” says Mr Choi, who has been in the post for a year.

A final word about the work in progress on the infrastructural development of Smart City Malta; Mr. Choi confirmed the completion of SCM01 that includes 12,000 square metres of business space, which is now fully operating. A tender for the construction of the upcoming four buildings have been issued, and this will mean the start of a new phase for the township.

Various locations of the campus will eventually be developed over the next twelve years in different times according to the market demand and the group’s strategic plans.

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AWARENESS

BMW 5 Series Sedan and BMW 5 Series Touring win 2011 iF Product Design Award Munich. 2011 sees a brace of 5 Series models – the new BMW 5 Series Sedan and the new BMW 5 Series Touring – presented with the coveted iF award for outstanding product design. With this internationally acclaimed prize, the International Forum Design once again pays tribute to the characterful aesthetics of BMW Group Design. Following the 2011 Design Award of the Federal Republic of Germany and the 2010 red dot award, the iF label marks a further chapter in the success story of the new BMW 5 Series range.

Since it was inaugurated in 1953, the iF Product Design Award has been a trademark distinction bestowed on exceptional design. As an internationally recognised “seal of approval”, the iF label honours outstanding design achievements and as such provides a platform for companies to submit their products for a professional assessment of their design quality by an international panel of experts. The 2011 award

YOUR FAMILY OR YOUR CAR It was Benjamin Franklin who said “Certainty? In this world nothing is certain but death and taxes.” Therefore, if Benjamin was right does it not make sense to financially plan for this certainty?

Planning in the sense that should the inevitable happen sooner than you had hoped, at least your survivors will be financially secure.

CONSIDER THIS: On the average, you can fully insure a family car with a value of approx €10,000 for around €300 a year – less than €1 a day. Most of us do this. On the average, a 40 year old male can insure himself in the event of his death for €100,000 for around €300 a year – less than €1 a day.

Most of us do not do this.

Assuming you, the reader, is a person with dependents (wife, husband, children etc), what will happen to those dependents should you unfortunately depart this earth sooner than expected?

Who will pay for your children’s education? How will your family feed themselves, maintain the house and continue to pay the daily bills? How will they maintain the standard of living they currently enjoy should you, the bread winner, no longer be around?

Why will we insure our car, yet won’t consider insuring the financial safety of our families?

The cost is the same but the outcome is totally different. One will replace your car whilst the other will put money in the bank should you die. This will provide your family and your dependents with financial security when they need it most. I know which one I would rather have.

Nobody likes talking about death. In fact, we perceive a certain invincibility with regards to our own death. It certainly won’t happen to me before I’m 70! Sadly for some of us this is not true. The financial effect of leaving behind a partner and a young family can be truly devastating yet the cost of protection is very cheap.

Some of you may well say I have life insurance. After all, the bank

made you buy life insurance when you got the loan for your house.

All that does should you die prematurely is repay the bank. Even though the loan may be repaid, your family still has to live. With no income, how are they going to maintain the house? How are they going to put food on the table and pay the bills. How are they going to maintain the lifestyle you currently provide for them? Equally as important, what will happen to your loved ones` future if you are not around to fund it?

What is more important to you?

Financial security for your dependents in the unfortunate event of your untimely death or an expensive car sitting outside your front door?

Benjamin didn’t say anything about motor cars!

Article by GlobalCapital p.l.c .

GlobalCapital p.l.c. is listed on the Malta Stock Exchange.

GlobalCapital Life Insurance Limited is authorised to transact Long Term Insurance Business and is regulated by the MFSA. Registered address: 120, The Strand, Gzira GZR 1027, Malta.

Amounts quoted above are for illustrative purposes only and based on a ten year time frame. Each and every Life Insurance proposal is assessed and underwritten on its own merits and may be for a different term. The cost may therefore differ and can be higher.

attracted a total of 2,756 products submitted by 1,121 participants from 43 countries, all vying for the prestigious prize. In the Transportation Design category, the BMW 5 Series Sedan and BMW 5 Series Touring managed to sway the judges. This means that both models have qualified for the contest to win the iF Gold Award, which selects the 50 “best of the best”.

The design of the new BMW 5 Series Sedan skilfully translates the car’s attributes into an authentic formal language. The sheer presence and elegance of its design express the Sedan’s premium quality and outstanding ride comfort, while its sporty driving characteristics are reflected in dynamic bodywork lines and the overall evocation of a distinctly athletic car. The superlative aesthetics of the new BMW 5 Series Sedan are further borne out by its perfectly harmonious proportions and meticulously finished details.

‘DELIVERING’ EXPERTISE C&C Express Limited is TNT’s associate in Malta. C&C is part of the Cassar & Cooper Group which was established in 1946 and has been involved in the courier sector for over 26 year’s of which 23 have been as TNT’s associate. This close cooperation between the two companies has benefited the local market by providing a choice of courier services, by air and by road, tailored to suite all nature of business and economic situation.

It was in June 2008 that TNT sent its first truck carrying courier material to Malta thus connecting the island with a fully integrated and comprehensive continental road network. This service known as ‘Economy Express’ comes with the same attributes as the daily Express Air Service namely, door-door, time definite and / day definite as well as all the electronic booking / tracking / e-invoicing systems.

Economy rates are cost saving albeit a slightly longer journey time, ‘6-working days door-door delivery from Shanghai to Malta by Economy Express’ is an excellent service.

Sales Manager, Mark Vella, heads the sales team at C&C Express. The team is fully aware that our business is all about our customers. What they value, their needs and their preferences.

And making sure our products and services really deliver. The team put a huge amount of effort into getting to know customers through regular contact and then make sure they act on their customer requirements.

Sales team contact: Tel: + 356 2558 4651 email: info@tnt.com.mt web: www.tnt.com

BUSINESS AGENDA | DEC – FEB 2011

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BUSINESS AGENDA | DEC – FEB 2011

AWARENESS

Membership with the Malta Chamber of Commerce, Enterprise and IndustryWhat Membership gives You

EXPERIENCE THE POWER OF THE CLOUD

The Malta Chamber of Commerce, Enterprise and Industry is a powerful voice for the business community. It provides a central, national organisation for the representation, promotion and protection of all members’ interests, as well as acting as an authoritative medium of communication between members’ sectors, Government, and the EU. The Malta Chamber also aims to establish and support initiatives which lead to the establishment of new business ventures and employment opportunities.

By Louise Mifsud, Marketing Manager at Microsoft Malta

LOBBYING REPRESENTATION The Malta Chamber plays an active role in safeguarding the interests of the business community and in cultivating mutual understanding between Government, unions and other employer organisations. More often than not, the needs and problems of individual entrepreneurs are shared by others. This is where collective representations by the Malta Chamber with Government can have greater and more effective impact than individual representations.

The wide possibilities offered

by Microsoft’s business productivity online services, also known as BPOS, and the use of these services within the wider context of cloud computing, were the main topic during a public event hosted

by Microsoft Malta on Monday 6th December, which was held at The Palace Hotel in Sliema.

The event which was attended by local business and technical decision makers from both public and private sectors was be addressed by two foreign speakers from Microsoft.

Werner Reuss, CEE Multicountry, Server & Tools Business Lead addressed the subject from a data center point of view whilst Wim Dierickx, CEE Multicountry Information Worker Lead spoke about cloud computing with special reference to how this contributes positively towards enhanced business productivity.

According to IDC, cloud computing is estimated to reach $55.5 billion revenue in 2014, up from $16 billion in 2009, forecasting an

impressive annual growth rate of 27.4 per cent. But what is this cloud everyone is talking about?

Microsoft thinks of the cloud very broadly, as a collection of hardware and devices (eg. PCs, servers, mobile devices) that use the internet to pool resources and work together. This pooling of resources occurs in large and modern data centers today, where servers work together to absorb more traffic during spikes and recover from hardware failures, all without human intervention. For organisations cloud computing makes it possible to lower costs and increase efficiencies, but it also creates opportunities to do new things in new ways, like entering new markets, new business models creating new customer experience and other opportunities.

Harnessing the power of cloud does not mean abandoning an organization’s existing systems or decades of IT investment. The cloud can often be additive to the applications, platform and infrastructure in place today and helps build off of existing strengths. In fact, moving

forward organisations will evaluate their entire portfolio of applications, platforms and infrastructure to determine which applications and workloads should move to the cloud, subsequently enhance applications with higher level services, and ultimately transform applications and experiences to take full advantage of the underlying cloud platform and opportunity. This can be done by: • moving to the cloud by shifting existing workloads to someone else’s datacenter via a virtual machine or through the virtualisation of an application; • enhancing local resources by using cloud computing technologies, via either private cloud or public cloud extensions, to existing workloads or; • transforming in a way that vastly increase the computing power available to any server, PC or device.

How does the cloud benefit individuals then? The cloud provides the power to securely store, access

and interact with information from any device. This means the ability to easily connect and share with the people you care about most. This can be enhanced experiences like collaborating and editing a work document from anywhere, searching for a last minute vacation on your phone or PC, sharing a vacation picture/video in real time with HD video chat, consuming family entertainment and managing one’s online identity.

The cloud provides the power to enable, connect, enliven and simplify individual’s lives. Most of what people do on their PCs, phone and other devices involve sharing with colleagues, friends and family. In designing Windows, Windows Live and Windows Phone and X-Box, Microsoft listened to how people wanted to use their devices to connect and create in many interactive ways. Connecting these devices to the cloud enhances these experiences and makes these technologies work for consumers. Furthermore the cloud enables anytime access to data on any device – personal updates, photo, music and entertainment.

Though cloud computing has only become a hot topic in the last few years, Microsoft has been running some of the largest and most reliable cloud services in the world for almost 15 years. The present Microsoft cloud computing solutions evolved from earlier work on XML, web services, and .NET programming over the last decade.

Microsoft Cloud offers software solutions to customers and partners to pursue traditional IT approaches and build their own cloud services and also host and manage the solution in global scale Microsoft-managed data centers. In addition to this Microsoft offers the combination of rich client experience like Windows PCs, Windows Phones and Xboxes as well as applications like Office, services like Bing and Windows Live and games such as Halo which all provide connected experiences designed around how people want their technology to work.

For further information on Microsoft Cloud Services please contact Microsoft Malta on +356 21381202.

Through membership with the Malta Chamber, members are guaranteed a voice at the highest levels of government. The Malta Chamber has not only the right, but also the duty, to speak up on behalf of its members whenever this is deemed necessary.

CONSULTATION An important aspect of the Malta Chamber's work is its consultative role vis-a-vis the Government and national institutions. The successful development of Malta's business community necessitates dialogue between the three social partners, that is, Government, employers’ organisations and the trade unions, Further business development and expansion in Malta depends largely on maintaining an investment climate within which industry can operate freely and effectively, always within the context of the national interest involving, amongst other aspects, environmental and social considerations.

In this regard, the Malta Chamber is represented on MCESD, Malta Enterprise, the Employment

Relations Board, Malta Standards Authority, MCAST and many other boards.

NETWORKING The Malta Chamber provides the ideal environment for networking through its frequent organisation of events, be it seminars, conferences and information meetings, as well as on a more informal level through its social events.

INFORMATION • WEBSITE: The Malta Chamber website offers regular updates on the Malta Chamber’s latest positions and media releases, information on our latest events and initiatives, as well as the services provided by our organisation.

• PUBLICATIONS: The Malta Chamber issues two regular publications: The first is the weekly Chamberlink newsletter which is restricted to members only. This information service relates trade information, forthcoming events and

the dissemination of news on the activities of the Malta Chamber.

The second is The Commercial Courier published bi-monthly.

This is considered as the mouthpiece of the Malta Chamber and is regularly distributed to members and local entities as well as to overseas Chambers of Commerce and trade organisations.

From time to time, the Malta Chamber issues special reports and policy papers as necessary.

It also regularly issues Press Releases, opinion pieces and other articles to convey specific messages to the general public through the news media.

• INFORMATION MEETINGS ON ISSUES OF CONCERN: These meetings are organised either exclusively to members or in collaboration with other entities such as ETC, MEUSAC, Malta Enterprise, Malta Standards Authority, or the Malta Business Bureau.

• SEMINARS AND CONFERENCES ON TOPICAL SUBJECTS: These events are part of the Malta Chamber’s education and business development initiatives, organised in collaboration with the Malta Chamber’s various thematic Committees.

• HELPLINE: The Malta Chamber staff is always available for any queries members may have, and are well equipped to assist members in answering these queries, and through our contacts, guiding members to the competent authority or organisation when necessary.

For further information on membership with the Malta Chamber please contact Ms Lorrieann Vella on lorrieann. vella@maltachamber.org.mt

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BUSINESS AGENDA | DEC – FEB 2011

EU AFFAIRS MALTA'S BUSINESS COMMUNITY CAN HAVE A

COMPETITIVE ADVANTAGE WHEN IT COMES TO INFLUENCING DECISIONMAKING IN THE EU

1. PROPOSAL FOR COMMISSION

decision making PROCESS

2. FIRST READING BY EP POSITION

3. AMENDED PROPOSAL FROM COMMISSION

1A. OPINIONS BY NATIONAL PARLIAMENTS 1B. OPINIONS, WHERE SPECIFIED, byESC AND/OR CoR 4. FIRST READING BY COUNCIL 5. COUNCIL APPROVES ALL EP'S AMENDMENTS

7. EP HAS APPROVED PROPOSAL WITHOUT AMENDMENTS

6. COUNCIL CAN ADOPT ACT AS AMENDED (WITHOUT FURTHER AMENDMENTS AND IN THE WORDING OF EP'S POSITION)

9. COUNCIL POSITION AT FIRST READING

10. COMMUNICATION FROM COMMISSION ON COUNCIL POSITION AT FIRST READING

8. COUNCIL CAN ADOPT ACT (WITHOUT AMENDMENTS AND IN THE WORDING OF EP'S POSITION) 11. SECOND READING BY EP

12. EP APPROVES COMMON POSITION OR MAKES NO COMMENTS

14. EP REJECTS COUNCIL POSITION AT FIRST READING

13. ACT IS DEEMED TO BE ADOPTED

15. ACT IS DEEMED NOT TO BE ADOPTED

16. EP PROPOSES AMENDMENTS TO COUNCIL POSITION AT FIRST READING

17. COMMISSION OPINION ON EP'S AMENDMENTS

18. SECOND READING BY COUNCIL

By Dr Julian Vassallo - Head, European Parliament Information Office, Malta If you ever thought that with just five Members of the European Parliament Malta cannot have an impact on EU decision-making, think again.

One only needs to look at the EP vote endorsing 20 weeks minimum maternity leave to see that if just five Members of the European Parliament who supported the measure had opposed it, the proposal would simply have failed.

The reality is that per capita Malta is extremely well represented in all the institutions of the European Union. This can afford the local business community the sort of direct influence on EU law-making that European cities and regions that represent a much larger proportion of the EU economy can only dream of. The issue is how Maltese business can put its case forward in a coherent, convincing and timely manner.

Under the Lisbon Treaty the socalled "community method" is the order of the day for almost all European Legislation. This means that draft laws are proposed by a College of Commissioners where Malta has a single Commissioner like all Member States and one with a portfolio of absolute relevance to business. That draft law then goes to the Council of Ministers and the European Parliament who in a fashion not dissimilar to bi-cameral Parliaments around the world must agree on a common text of the law if it is to make the statute books.

Yes, it is a fact that Malta's votes in both the European Parliament and the Council of Ministers are but a small portion of the majority (or blocking minority) required to swing a vote. So if these two institutions operated just on numbers this would be fatal for Malta's interests and its influence. But the truth is neither institution operates as a "numbers game".

The Council of Ministers seldom votes and usually strives for unanimity around a common position where the legitimate interests of

all member states are protected.

Meanwhile in the European Parliament it is the positions adopted by the main political groups and their negotiations with others that dictate where the Parliamentary majority will lie. Effectively, a single well-prepared MEP can, through his political group, swing the Chamber.

So in both institutions a well-presented convincing argument, even one coming from the smallest EP Delegation or the smallest Member State government can potentially carry the day.

Here lies the competitive advantage of the Maltese business community when it comes to influencing EU decision-making. In a country known for the accessibility of its MEPs, its Ministers and its Commissioners it is much easier for Maltese business to channel a good argument into the EU than it is for many larger, more powerful business communities around Europe.

And on the same basis it can therefore be easier for Maltese business to have its arguments actually aired in the crucial meetings of the Commission, Parliament and Council of Ministers than it is for many larger and stronger actors.

Timing is of the essence. It is no use reproaching our MEPs or Government for voting one way or the other unaware of the negative impact that such and such a law would have on local business. It is incumbent on stakeholders to be ahead of the game and to make their views and concerns known before the proverbial horse has bolted from the stable.

The table alongside explains which institutions are in the driving seat at each phase of the EU legislative process. This is who Maltese business should be targeting at any given time if it wants to protect its legitimate interests and utilise its competitive advantage to influence EU legislation applicable to 500 million people.

19. COUNCIL APPROVES AMENDED COUNCIL POSITION AT FIRST READING (I) BY A QUALIFIED MAJORITY IF THE COMMISSION HAS DELIVERED POSITIVE OPINION (II) UNANIMOUSLY IF THE COMMISSION HAS DELIVERED NEGATIVE OPINION

21. COUNCIL DOES NOT APPROVE THE AMENDMENTS TO THE COUNCIL POSITION AT FIRST READING

20. ACT ADOPTED AS AMEND

22. CONCILIATION COMMITTEE IS CONVENED

23. CONCILIATION PROCEDURE 24. CONCILIATION COMMITTEE AGREES ON A JOINT TEXT 25. EP AND COUNCIL ADOPT ACT CONCERNED IN ACCORDANCE WITH JOINT TEXT

27. EP AND COUNCIL DO NOT APPROVE JOINT TEXT

26. ACT IS ADOPTED

28. ACT IS NOT ADOPTED

29. CONCILIATION COMMITTEE DOES NOT AGREE ON JOINT TEXT

30. ACT IS NOT ADOPTED

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