NEWS | Wednesday, 04 March 2009

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Prime Minister Lawrence Gonzi yesterday informed the House of Representatives of the outcome of last Sunday’s informal meeting between European heads of state in Brussels, outlining three major objectives facing the European Union.
Outline the importance of this meeting to Malta, Dr Gonzi referred to a memorandum circulated among Prime Ministers of all 27 EU states on 26 February, in which Commission president Jose Manuel Barroso identified three areas of primary concern: restabilising Europe’s financial sector; ensuring that individual member state’s actions yield a positive effect on the union’s economy as a whole; and safeguarding jobs.
Although some of the sectors discussed in detail last Sunday – among them, Europe’s ailing vehicle manufacturing industry – appear at a glance to have little local relevance, Gonzi reminded the House that Malta’s important manufacturing sector, which features international names like Methode, Trelleborg and Parmagan, relies primarily on European markets, as do industries such as tourism.
Europe’s prime ministers all agreed that the current challenges can only be overcome by co-ordinated efforts of all members, within in the framework of the Single Market and the European Economic and Monetary Union.
This also explains the Maltese government’s continued position in favour of free trade and against all forms of protectionism.
The meeting concluded that the Union’s actions should address three basic aims.
The first is to restore confidence and promote financial stability. The thawing of international credit is crucial to the effective functioning of the financial stimulus initiatives undertaken by individual Member States; indirectly, this is of vital importance to Malta’s major industries, which depend on European markets. It was therefore imperative for Malta’s interests that European credit resumes its normal rhythm, so that clients of Malta-based factories can continue to finance their operations.
The meeting therefore decided that “impaired banking assets” are to be treated according to guidelines lain down by the Commission on 25 February, and in conformity to European competition laws.
The Prime Minister also expressed his confidence in the findings of the de la Rosiere report – a study of financial institutions’ surveillance systems, conducted by eight leading financial experts – which he described as a “concrete and positive step” towards avoiding a repeat of the global crisis. (The main recommendation in the de la Rosière report is that a new body should be established to monitor risks to the financial system. Known as the European Systemic Risk Council, it would work under the aegis of the European Central Bank in Frankfurt.)
The second aim is for Europe to commit itself to economic recovery in real terms. Gonzi defined the Single Market as the motor of economic growth and job creation: to this end, European leaders discussed in depth the Commission’s communications regarding the automotive industry, as well as its proposals for the renewal of motoring fleets.
The Commission will also analyse the various systems used in different member states to ensure the speedy and effective exchange of reciprocal information regarding national economic measures, as well as to monitor similar developments in third countries.
Regarding jobs, Dr Gonzi alluded to the various European instruments at the disposal of member States, including the European Social Fund and the European Fund for Adjustment to Globalisation. Later this spring another summit will be held specifically to address the problems facing the job market.
The third aim, Dr Gonzi explained, is to work together as a united Europe on a global level. The Union’s internal action to restore financial stability and promote open markets should be adequately reflected on the international scene, without losing sight of the particularly situations of developing countries. The conclusions of the Doha Development Agenda should be a positive step in this regard.
Despite the global credit crunch, the Maltese government’s aim is still to create more and better places of work, achieved through the necessary economic reforms so that the country remains competitive in all sectors, and attracts local and foreign investment alike.

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