Working towards ‘Certainty’
In my day to day meetings with economic operators and professionals, and from my analysis of the key discussion trends, it is evident that the most tangible current concern is theunknown!
One thing is certain, that the initial stop-gap measures introduced by this Government helped mitigate unemployment by providing a breathing space to Maltese businesses.
Indeed, in Malta we can safely say that the pandemic was not as detrimental toour economy as the impact in other countries withinthe European Union. This was thanks to the measures that the government introduced in a timely manner. However, this is in no way an indication that we are out of the woods. Stakeholders agree that the rules of business have changed beyond recognition.
Investment and support provided to companies should not be limited to helping them get back on their feetbut should also be designed to make our business future-proof, in a time when the only thing that is certain is the unknown.
This pandemic has created a divide: some businesses came to a halt, whilst others thrived. Many sought to be creative and found ways to make their products and services ‘Covid worthy’. It did not necessarily provide them with a profit, but it helped them survive and sustain their relevance, helping them place a foot in the market.
We are facing a lot of firsts. However, this pandemic has taught us that people and businesses are capable of changing. Nothing is impossible. Now is the time to capitalize on talent and help support innovative ideas. Itisalso the time to truly support our local economy by supporting local businesses.
In this spirit and because I wholeheartedly believe that our businesses have to survive this uncertainty and create a new certainty,I have embarked on a campaign to support local products, starting off with the agricultural sector. Even the little things can make a big difference.
In supermarkets, local and imported products should be labelled accordingly. As things currently stand, consumers who genuinely want to buy local produce end up sifting through a mix of local and imported products without necessarily realizing whatiswhat. At the same time, we need to ensure that there is real,concrete help so that farmers can invest in modern technology whilst having the opportunity to nourishinnovative ideas. I know the appetite is there, especially amongyounger farmers, who have plentyof ideas that we can adapt and adopt. It would be an absolute pity if we had to let these opportunities slip away.
The European Union has to do its part too. As the European Commission unveils a 750 billion-euro aid package to help the EU recover from the Coronavirus pandemic, it will be up to the 27 Member States to unanimously back this plan. Member Statesweredivided on whether loans or non-repayable grants are the best approach to fund this recovery.
Initial figures are allocating €992million to Malta. Out of these, only €350 million are grants, whereas the rest are loans. I firmly believe that no country should rely excessively on loans, which ultimately must be paid back and have the potential of submerging countries into deeper debts. The recovery plan is incorporated in the Multiannual Financial Framework and money has to be raised by the Member States themselves. In the discussions I am already having I am insisting that financing the recovery plan by taxes is a cause for concern for the Maltese delegation as it has the potential of undermining fiscal sovereignty and negatively impact economies with permanent structural challenges like ours.
I will continue insisting that sectors that are the hardest hit, are given the greatest support. During a meeting with Commission President, Ursula Von Der Leyen last Wednesday I insisted that countries like Malta that are heavily reliant on tourism need to be supported financially through higher grants. I insisted also that countries like ours that worked hard to reduce unemployment rates, should not end up being penalised.
A strong recovery plan should have a strong social dimension, addressing social and economic inequalities and supporting sustainable growth. For Malta this would mean, among others, direct payments for investment and possibly also looking at more state equity participation that will serve to provide more capital inflows in strategic sectors of the Maltese Economy;a recipe used by various governments to provide stability during the 2008 banking crises.
I also strongly believe that the key to recovery lies in the priorities of the Green Deal and the digital agenda. Without a doubt, this is the future. The Green Deal can ensure economic growth, social protection and environmental integrity and can create jobs as well as ensure competitiveness. The ones whostand to benefit the most from this are our own SMEs and workers who need to be trained to acquire skills that can truly mitigate the impact of the crisis.
The European Commission has now submitted its proposal for a recovery plan. This proposal is yet to be discussed in Parliament and at Council level, with the aim of reaching an agreement in July. As early as this week we embarked on discussions to make sure that Malta’s interests are protected in the process, and together with my colleagues I will continue defending our citizens’ position strongly.
One thing is for sure: I will be working hard within the structures of the European Parliament to create some certainty in a time when uncertainty is the only certainty.
This opinion piece first appeared in The Sunday Times of Malta